Natural gas prices for the November 2020 prompt month ended yesterday’s session 0.8% higher at $2.7950/MMBtu. The market exceeded the 19 month high, set last week of $2.88/MMBtu, during today’s trading session. As of 10:38 am EST this morning, the November 2020 natural gas prompt month was trading at $2.928/MMBtu, which is up $0.133/MMBtu.
The factors driving up pricing are:
Post coronavirus rebound in the market.
Natural Gas Storage – This has been shrinking. There is also concern over continued shrinkage due to winter weather that is right around the corner. As of October 9, 2020, underground natural gas storage is at 3.877 Tcf (trillion cubic feet), just 10% above the 5-year average. It was almost 20% above the 5-year average several months ago.
Source: US Energy Information Administration / eia.gov
Weather – There is concern about the impact that cold weather will have over the upcoming months on the draw from underground natural gas storage. Also, even with employees working from home the demand to heat homes coupled with heating office buildings is also another concern.
Source: noaa.gov / Climate Prediction Center
Another signal that volatility in the natural gas market, which affects electricity prices, continues.