Analysis: Henry Hub Summer 2021-22 Gas Future Meeting Cools on Storage, Climate View

Highlights

The December-January-February average is down to $ 4 / MMBtu

Gas storage ends 2.8 TCF, narrowing the gap to 174 BC

Weather forecasting requires a simple winter

As the U.S. stock market stagnated and future weather forecasts took shape, a steady march in the Henry Haw winter gas market has recently lost business.

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Over the past two weeks, the December, January and February high winter carriers have dropped by 20 to 21 cents on August 23 at $ 4.13, $ 4.18 and 4.11 / MMBtu, respectively, according to S&P Global Platts’ recently published M2MS data.

In the August 24 trade, CME Group data shows that NewMX’s futures are down 2 cents from the previous settlements for the same months of high demand.

Winter 2021-22 While gas prices have risen by historical standards, a series of stock market reports from the US Energy Information Administration indicate that this year’s shortfall has begun, and that the market for more than four months now looks set to lose steam. To narrow. As the winter months draw to a close, market confidence, long-term weather forecasts have further eroded the sense of decay in the future and in the future of gas markets.

Storage

Widespread U.S. gas storage shortages since early April have helped fuel winter prices.

After launching stocks at around 1.85 TCF, the average profit margin for the five-year period slowed sharply, lowering stocks to an average of 190 Bcf by early July.

More recently, the larger needles helped to narrow the deficit to 174 Bcf, with winter resources now estimated at 2,822 Tcf for the reporting week ending August 13.

S and P Global Platform analysts say there is good reason to believe that this season’s stock is declining in the coming harvest months.

This summer, fierce gas-flame fires have pushed the demand for generators up to $ 3 a month, and now $ 4 gas prices are out of stock. Although the limited heat capacity in the generation pile is still limited to fuel conversion, the cold temperatures in September and October should provide more energy for coal-fired power plants than gas.

According to Platt analysis, the conversion trend should allow more gas to be transferred to storage.

Weather

More volatile in this winter gas market, the U.S. National Weather Service last week forecast for December, January and February last week, forecasting a 30% -40% probability of above-average temperatures in the states from Maine to Florida. All over Southeast and Texas, as well as desert southwest.

The most well-known is the Northeast Temperatures. The region’s key heating demand for the gas market is that states along the northeastern Atlantic coast typically account for more than a third of the total U.S. residential gas demand during the winter months.

Over the past three winters, demand for warmth in the northeast from November to March has dropped to 15.4 Bcf / d in the cold season and 13.4 Bcf / d in the winter. Platform analysis data shows that the region’s re-com average is close to the middle point of both extremes this winter.

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