The Energy Buyer's Guide | 08.19.2024
Natural gas turns back lower despite bullish storage report.
- Natural gas prices were down modestly on the front of the forward curve after a rally fizzled out, while deferred contracts beginning with the upcoming winter recorded steeper losses.
- Storage inventories declined by 6 Bcf during the week ended August 9, marking the first mid-summer withdrawal in eight years and just the fourth on record. (Link)
- Power forwards were down across the board, with balance-of-year deliveries at or near multi-year lows across all market areas.
- Temperature forecasts calling for mostly mild weather in all regions outside of the South Central and Mountain Regions suggest soft overall fundamental conditions during the upcoming week, but patterns are now expected to warm back up following the 1-5-day period. (Link)
Prompt-month natural gas futures were down modestly last week, but the market experienced more pronounced losses further out the forward curve. Prices looked to be on the verge of the second straight weekly increase, but technical resistance above $2.27 per MMBtu ultimately held up to multiple tests and helped propel benchmark pricing lower into the weekend. The Winter 2024-25 strip, which had recovered notably from lows near $3.00 per MMBtu notched two weeks ago, gave up 14 cents on the week, while Summer 2025 was down by 11 cents compared to week-ago levels. These strips rounded out the week virtually in line with each other, which is in contrast to the shape of the curve prior to July that saw upcoming winter contracts trading at a steep premium to the following summer.