In an EBW Analytics Group report sent to Rigzone by the EBW team on Monday, Eli Rubin, an energy analyst at the company, outlined that “bullish weekend shifts revive[d] upside momentum” in natural gas.
“The November natural gas contract retreated to $3.307 [per million British thermal units (MMBtu)] Friday afternoon, down 27.8¢ (-8 percent) off Thursday’s high, as the early-week short squeeze relented,” Rubin said in the report, which highlighted that the November natural gas contract closed at $3.324 per MMBtu on Friday and pointed out that this was down 11.8¢, or 3.4 percent, from Thursday’s close.
“Over the weekend, however, rising LNG, faltering production, renewed pipeline maintenance, and hints of cooler weather are rekindling upward momentum at the front of the curve,” Rubin added.
“Fundamentally, record Gulf Coast LNG feedgas intake is lifting demand while pipeline maintenance limits supply inflows into Henry Hub to create a bullish combination,” Rubin continued.
“Late-October weather is shifting cooler; the European model offers a 10-HDD [heating degree day] increase since Friday and chances for cooler air incursion,” he stated.
Rubin went on to note in the report that, “high-level, short-term bullish caution features storage on a trajectory above 3,900 billion cubic feet, coupled with mild October weather”.
“Unlike last week, however, stronger fundamental underpinnings for this week’s upside could bridge the transition to a more robust medium-to-long term upside – particularly if late-October cold develops further,” he added.
In a separate EBW report sent to Rigzone by the EBW team on Friday, Rubin said the November natural gas contract reached $3.585 on Thursday “after a particularly bullish EIA [U.S. Energy Information Administration] storage surprise – only to tumble 14.3¢ into the close and continue lower early … [Friday morning] as the early-week short squeeze begins to fade”.
“Henry Hub spot prices continue to derive physical strength from Permian pipeline outages, strong Gulf Coast LNG demand, and late-season cooling demand,” Rubin noted in that report.
“As local CDDs begin to retreat, however, and the national heating demand outlook is meager, filling storage and retreating demand are bearish divers heading into mid-October,” he added.
“[Thursday’s] EIA surprise and pipeline maintenance remain supportive short-term and, in our view, hint at long-term indicators of strength,” Rubin said in the report.
He added, however, that “storage surpluses and mild October weather suggest the bulk of upside potential for NYMEX natural gas futures is beyond the end of the 2025 injection season”.
This report highlighted that the November natural gas contract closed at $3.442 per MMBtu on Thursday. This figure represented a drop of 1.0¢, or 1.0 percent, from Wednesday’s close, the report outlined.
In its latest weekly natural gas storage report at the time of writing, which was released on October 2 and included data for the week ending September 26, the EIA stated that working gas in storage was 3,561 billion cubic feet as of September 26, according to its estimates.
“This represents a net increase of 53 billion cubic feet from the previous week,” the EIA said in this report.
“Stocks were 21 billion cubic feet higher than last year at this time and 171 billion cubic feet above the five-year average of 3,390 billion cubic feet,” it added.
“At 3,561 billion cubic feet, total working gas is within the five-year historical range,” it went on to state.
Executives from oil and gas firms revealed where they expect the Henry Hub natural gas price to be at various points in the future in the third quarter Dallas Fed Energy Survey, which was released recently.
The survey asked participants what they expect Henry Hub natural gas prices to be in six months, one year, two years, and five years. Executives from 121 oil and gas firms answered this question and gave a mean response of $3.35 per million British thermal units (MMBtu) for the six month mark, $3.53 per MMBtu for the one year mark, $3.94 per MMBtu for the two year mark, and $4.50 per MMBtu for the five year mark, the survey showed.
According to its latest short term energy outlook (STEO), which was released on September 9, the EIA sees the Henry Hub natural gas spot price averaging $3.52 per MMBtu in 2025 and $4.28 per MMBtu in 2026. The commodity averaged $2.19 per MMBtu in 2024, the STEO showed.
EBW Analytics Group provides independent expert analysis of natural gas, electricity, and crude oil markets, the company’s site states.
Rubin is an expert in econometrics, statistics, microeconomics, and energy-related public policy, the site adds, noting that he is “instrumental in designing the algorithms used in our models, and in assessing the potential discrepancies between theoretical and practical market effects of models and historical results”.
On its website, the Dallas Fed states that it conducts the Dallas Fed Energy Survey quarterly to obtain a timely assessment of energy activity among oil and gas firms located or headquartered in the Eleventh District. The Eleventh District encompasses Texas, northern Louisiana, and southern New Mexico, the Dallas Fed highlights on its site.
The EIA states on its website that it collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment.
To contact the author, email andreas.exarheas@rigzone.com
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