Friday, September 27, 2019 at 4:18PM
It was another down week for natural gas prices, with the new prompt month November contract barely settling over the 2.40 level in today's session, down more than 30 cents from its high trade early last week. The bulk of this week's decline came yesterday, with the biggest push lower coming in the wake of another very bearish EIA report, the second in as many weeks. This one showed that we injected a massive 102 bcf for the week ending 9/20. The number reflected supply / demand balances that were looser than any of the last 10 weeks. In fact, the two loosest numbers in this 10 week span were in the most recent two reports. Isolating the same gas week in prior years shows very loose balances as well. With two bearish misses in a row, one wonders if there is more production coming out of Texas than is currently showing up in the data, possibly related to the Gulf Coast Express pipeline coming into service. It certainly has not been due to lack of weather demand, as the week ending 9/20 was easily still hot enough to drive demand to above normal levels, thanks to some record heat in the South. In the near-term, demand will remain at elevated levels as well, with more record heat expected in the South, and some early season cold in the West, adding in some HDDs. Notice in the 11-15 day portion of that chart that demand lowers to normal / slightly below normal levels. That is not something bulls want to see. But will it last? Recall just last year we saw a very warm pattern flip cold in the middle of October and hold for six weeks, so we will be monitoring the signals closely. Sign up for a 10-day free trial here to take a closer look at what our current research is suggesting, and what it means to future movement of natural gas prices.