Henry Hub natural gas futures for November are finally trending downward, trading at US$5.12/MMBtu as of 2:20pm EDT Thursday afternoon, down $0.42/MMBtu from the week prior. Warmer weather forecasts, calling for late October and November to be warmer than normal, have helped push prices lower. As published in their October Short-Term Energy Outlook report, the EIA expects prices to remain elevated throughout the winter. US exports of liquefied natural gas (LNG) are on track for a record high this year, averaging 9.7 Bcf/d, up 3.2 Bcf/d from the 2020 record high of 6.5 Bcf/d, and are anticipated to reach new record highs in 2022. The EIA is forecasting Henry Hub natural gas prices will decrease in the second quarter of 2022, as expected growth in domestic natural gas production begins to outpace growth in US LNG exports. The EIA estimated working gas storage was 3,461 Bcf for the week ending October 15th, following an overall injection of 92 Bcf. The injection was in line with market expectations ranging from 88-95 Bcf. This is the sixth straight week that the injection has exceeded the five-year average, with the current weeks’ five-year average of 69 Bcf, while the year prior saw an injection of 49 Bcf. Storage levels are now 11.7% below year-ago levels and, relative to the five-year average, 4.2% less.

In Canada, prompt-month futures for AECO are trading at C$4.95/GJ, while Dawn is trading at C$5.86/GJ. Prices at Dawn have declined, with a week-over-week decrease of $0.43/GJ, while prices at AECO have increased week-over-week by $0.05/GJ. Point Logic reports Canadian natural gas storage for the week ending October 15th was sitting at 669 Bcf, after an overall injection of 10 Bcf. This injection increases storage inventories to 6.2% below the 5-year average and 14.5% below storage levels last year at this time. Eastern storage levels are now at 98% capacity and Western storage is 69% full. Injections for the week ending tomorrow are expected to come in at 3 Bcf.

– Karyn Morrison, Energy Advisor

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