April 21, 2023
NATGAS prices continue the slight rally after contracts rollover.
After the rollover of futures contracts on US HenryHub (NATGAS) , bulls are trying to maintain momentum and push prices above 2,4 USD despite yesterday’s weak for buyers EIA report, which showed higher than expected inventories growth:
- According to NatGasWearher analysts, a rally to $3 could be warranted if US production falls below 99 bcf/d. Kinder Morgan data indicated that Q1 2023 production was in the ‘boom phase’ at around 101 bcf/d. If production does not fall, prices will depend primarily on the weather;
- U.S. price increases are supported by the forecast that late April and early May will be cooler. However, NatGasWeather believes that an earlier start to summer would be more favorable for prices, also driving speculation of high temperatures this year. They also expect the rate of inventory growth to slow in future readings;
- The total amount of gas in U.S. storage was 1,930 Bcf, up 488 bcf from levels a year ago. It is also 329 bcf higher than the five-year average;
- Gas storage operators in Germany have warned that gas stocks could fall sharply if the heating season is not as mild as the previous one;
- German gas storage facilities are 70% full (a record as of 2019), and German gas consumption, down 16% y/y in 2022 according to the Gas Exporting Countries Forum. According to Eurostat, however, gas demand in Europe fell less, by 3% y/y;
- Researchers from the German Gas Storage Association (INES) indicated that security of gas supply has still not been restored and even moderate temeratures next winter could seriously deplete storage facilities. Maintaining 40% of reserves by January 2024 will be quite a challenge;
- German agency reported that Germany needs to raise the filling of storage facilities to 75% to avoid possible problems with reserves, and to consider more options, including in the form of supply contracts, to secure itself energetically.
NATGAS prices continue the slight rally after contracts rollover. Looking at the chart in a wider interval, the price is still nearly 80% lower than the 71.6 Fibonacci retracement level of the upward wave initiated in March 2020. Source: xStation5