Natural Gas Prices Respond to Moderating Temperature Forecast

Yesterday, the February 2010 natural gas NYMEX contract price fell $.203 per MMBtu following the release of the weekly Energy Information Administration (EIA) storage withdrawal report.  For the week ending January 1, 2010, the EIA reported that 153 Bcf had been withdrawn from natural gas storage inventories.  This is the first time in the past month that the actual withdrawal was close to expectations.  Meanwhile, physical natural gas prices rallied as colder weather is creating well freeze-offs, operational flow orders, and potential force majeure situations.

“It appears that the natural gas NYMEX futures market is looking ahead, which is what it is supposed to do,” says Valerie Wood, President of Energy Solutions, Inc.  “The most recent 8-14 day weather outlook calls for above normal temperatures in the northern part of the U.S., with below normal temperatures being confined to the southeast part of the U.S.”

“However, natural gas prices on the NYMEX have actually been quite fickle,” says Wood.  “Natural gas NYMEX prices have been moving south one day and then doing a quick flip-flop to head north the next. There’s no clear trend at this time, but we expect that to change by at least the end of January.”

Learn more about natural gas pricing trends in the January edition of The Advisor, a newsletter specifically written for businesses as an educational tool and guide about the natural gas industry and price trends. Request a complimentary copy of the January edition of The Advisor by sending an e-mail to request-pr@energysolutionsinc.com or call (608) 848-9589.

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About Energy Solutions, Inc.

Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 25 years of experience in the natural gas industry, our team focuses on natural gas prices and in helping businesses improve their internal processes for the purchase of natural gas.