The natural gas futures market continues to slide brought on by light demand in the main consuming region, Northeast. The current El Nino winter has unseasonably warm temperature blanketing the northeast consuming region and as long as it is 45 degrees in the dead of winter in NYC, there simply is little need for natural gas heat. The March NYMEX futures contract dropped to under $2.00 per MMBtu on 2/4/2016 and settled the day at $1.972. The $2.00 level is a major “psychological” support level and if it maintains (and the weather doesn’t break) then we could easily see a continued sell off during the month dropping pricing down to the mid $1.75-$1.50 range at various liquid receipt points.
Weather Services International (WSI) has updated their 11-15 day forecast which now show “above – normal” temperatures for most of the US, other than the Northeast. This potentially colder weather forecast “may” be just what the market needs to get a little “shot in the arm” and rally the natural gas market. For the weekend, NYC is expected to see mean temperatures near 35 degrees and that alone wasn’t enough to move the daily cash market at all. This yielded a price into NYC slight over the Gulf of Mexico pricing.
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