Market Updates

Market Update: November 29, 2023

Natural gas prices continue to tumble as the December contract rolled off the board. Strong production and a warmer change in the weather forecast were key drivers in the price drop. Multiple weather models for the 8-14 outlook trended colder before the holiday break giving bullish investors hope for some support. Those hopes were soon dampened as models reversed course displaying warmer probabilities into mid-December. The strong production and milder temperatures will influence storage as one analyst, Tudor, Pickering, Holt & Co. are now forecasting storage levels to reach 4 TCF at the end of the next injection cycle in October 2024. The latest storage report stated by the EIA further widened the surplus to both the 5-year average and last year delivering a 7 BCF withdrawal. Inventory levels currently sit at 3.826 TCF which is 249 BCF above the 5-year average and 251 BCF above last year.

NYMEX Natural Gas Futures

Electric Pricing Forward Calendar Strips

Working gas in underground storage compared with the 5-year maximum and minimum | EIA

Temperature Outlook: November 29- December 5, 2023 | NOAA

Crude oil continued to drop again this week ahead of the OPEC plus meeting that was rescheduled for November 30th. It is being reported that the meeting delay is due to some friction within the cartel as some members such as Nigeria and Angola could continue to raise production. Spartan Capital’s, Peter Cardillo believes that the crude market is technically weak ahead of the OPEC plus meeting.

According to the latest Baker Hughes rig count report, total rigs rose by four last week to 622 rigs. There was no change in crude rigs, while gas rigs rose by three and miscellaneous rigs rose by one. One year ago, the total rig count sat at 784 rigs.

This week’s additional graphic is the latest three-month temperature outlook for January through March 2024 from the National Weather Service Climate Prediction Center.

Seasonal Temperature Outlook - Valid: Jan-Feb-Mar 2024 - Issued: November 16, 2023 | NOAA

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