NGI’s Hub & Flow What’s the Winter Outlook for Natural Gas Prices?
Dec 9, 2024
Steve Blair, Managing Director of Institutional Energy Sales at Paragon Global Markets LLC, shares insights on the shifting landscape of natural gas prices this winter. He discusses the impact of increased production and storage levels on market dynamics, emphasizing how extreme cold weather could drive demand. Blair also highlights potential wild cards for 2025, such as tariffs on imports from Canada and Mexico, and the ongoing buildout of the U.S. export complex, shaping the future of the natural gas market.
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Storage Impact on Futures
- The current natural gas storage overhang doesn't need to fully disappear for futures to rally.
- However, reducing it or shifting to a deficit would be positive for the market.
Production and Price Impact
- Production has significantly increased due to the extreme cold weather, particularly in the Midwest and East Coast.
- However, its impact on prices is limited unless combined with significant weather forecast changes.
Winter Weather's Impact
- Predicting the natural gas market depends on whether a true winter arrives or if mild conditions persist.
- The past two winters in the East and Northeast have been mild, resulting in ample gas storage by winter's end.