A quick message before a begin my speech begins in Dallas, the natural gas market held up surprisingly well after trading down .100 in today's early session.
The EIA amended their storage reporting methodology which added another 7 Bcf onto an already record high storage supply in the U.S. pushing current storage to 3,985 Bcf.
The real market driver, however, has been the recent change in the weather forecasts with winter heating demand finally expected to arrive in the high usage Midwest and Northeastern parts of the U.S. Previously colder forecasts from the past weekend have moderated to some degree which is one of the reasons market prices have pulled back from recent highs.
That said, winter is coming which could keep sellers at bay as they digest the change in weather-related events with storage also reaching a record high.
If winter is mild as many of the longer range forecasts predict, there is a strong likelihood that the 1.948 low set in October will be broken. Personally, with nothing to actually base this assumption upon, I would guess that winter weather demand will end up being much higher than the market is currently pricing in and that a multi-year price low in natural gas has in fact already been set.
Time will tell who is correct but the ongoing drop in U.S. natural gas production is another factor also not being discounted by the market.
Between winter weather demand and U.S. production, a new bull market may be forming in natural gas.
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