What’s Affecting Gas Prices? (Week Of Dec. 18)

Bloomberg scrapes show us that natural gas field production was slightly tighter this week. Forecasts of warm weather for the next two weeks have caused a decline in gas prices. Average imports from Canada have increased marginally from 5.02 billion cubic feet per day (Bcf/d) last week to 5.41 Bcf/d this week. Mexico exports remained stable.

Our analysis leads us to expect the EIA to report later this week that there was a 120 Bcf withdrawal for the week ended Friday, Dec. 14 (lower than the current 139 Bcf consensus withdrawal expectation and lower than the 134 Bcf five-year average withdrawal).
The supply-demand balance in natural gas markets has been thin in 2018. As the year draws to a close, even the 8 Bcf/d production gain year-on-year has not been sufficient to keep up with demand and exports. This has subsequently left little buffer in the storage inventory.