Richard Meyer Natural Gas Market Indicators: December 15, 2016

Natural gas demand in the lower-48 climbed above 100 Bcf on December 8, a first for the 2016–17 winter and the highest consumption level since February. If arctic air moves into North America and temperatures drop and stay low, we’re likely to see a number of 100+ Bcf days during December. Supplies are still well positioned to meet this uptick in demand.

Storage inventories are still at about 3.9 Tcf; production remains above 70 Bcf per day; and pipeline and LNG imports are there to help meet additional pulls on the system. However, the market has decided that supplies are going to be needed sooner rather than later. Natural gas moved into normal backwardation in early December.

With January 2017 contracts calling for a premium to subsequent months, traders may be sending signals that even more supplies could be needed to meet a January cold snap. All is dependent on where temperatures go from here. The market is poised and ready to meet whatever demand is thrown at it. Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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