Natural Gas Squeezes in Largest One Day Percentage Move on Record as Traders Caught Short Molecules

Into settlement Natural gas squeezed for the largest one-day percentage move on record and highest finish since October. February delivery settled at $6.265 per million British thermal units, up $1.99, or 46.5% on NYMEX. Earlier in the day the EIA reported a higher-than-expected draw of -219 Bcf of working gas in storage. U.S. domestic natural gas demand continues strained with volatile weather.  Natural gas futures soared yesterday after the Atmospheric G2 model showed the largest reversal this winter, meaning projected heated demand is much higher for the next two weeks. There is a massive snowstorm heading toward the East Coast.

Colder than normal temperatures are expected in the central and western U.S. from Feb 1-5, and below-normal temperatures are expected across the eastern and southern U.S. from Feb 6-10 There is a massive snowstorm heading toward the East Coast. Prior to the EIA report February Nymex gas futures contract settled Wednesday at $4.277/MMBtu, up 22.4 cents from Tuesday’s close. March settled up 14.2 cents to $4.036.

Into settlement Natural gas squeezed for the largest one-day percentage move on record and highest finish since October. February delivery settled at $6.265 per million British thermal units, up $1.99, or 46.5% on NYMEX.

Well below-normal temperatures in the U.S. are boosting domestic U.S. nat-gas demand as BNEF data shows lower 48-state nat-gas demand Thursday was 105.5 bcf, up +1.2% y/y. The Edison Electric Institute reported Wednesday that total U.S. electricity output in the week ended Jan 22 rose +10.3% y/y to 85,137 GWh (gigawatt hours).  Cumulative U.S. electricity output in the 52-week period ending Jan 22 rose +2.9% y/y to 4,044,209 GWh.

U.S. natural gas supplies are more than 10% below last year’s levels, and -1.0% below their 5-year average.

Geopolitical concerns continue to support natural gas prices on concern tensions between Russia and Ukraine could potentially restrict gas flows to Europe.

Another bullish factor for natural gas prices is strong foreign demand for U.S. supplies after BNEF data showed gas flows to U.S. export terminals Wednesday were up +32% y/y at 12.99 bcf, just below the record of 13.22 bcf set Jan 16.

Natural gas Prices were up across the curve

Natural Gas Feb 22 Last Day

Sources: CME, TradersCommunity

From The TradersCommunity US Research Desk