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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Quick takeaways
- Current natural gas storage levels above the five-year average could positively influence market prices as winter approaches.
- Rising global LNG demand, particularly from Europe and Asia, is a crucial factor impacting U.S. natural gas pricing this season.
Deep dives
Natural Gas Storage and Market Outlook
Current natural gas storage levels are above the five-year average, which could positively impact market prices entering the winter season. Though an overhang in storage is not necessary for a winter rally, reducing it or transitioning to a deficit would benefit the market dynamics. Producers have been reactive to fluctuating prices, adjusting production levels in response to market conditions. As the injection season concludes, storage is positioned close to the four trillion cubic feet (TCF) mark, indicating a strong starting point for winter demand.
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