Market volatility continues this week, as prompt-month Henry Hub natural gas futures are trading at US$5.77/MMBtu as of 1:35pm EDT. After plunging to a low of US$5.16/MMBtu on Monday, prices rebounded to reach a high of US$5.865/MMBtu on November 3rd, as the peak-demand winter heating season approaches and the supply/demand balance remains tight. The EIA estimated working gas storage was 3,611 Bcf for the week ending October 29th, following an overall injection of 63 Bcf. The injection was in line with market expectations ranging from 55-71 Bcf and continues to exceed the five-year average for the eighth straight week, with a five-year average build of 38 Bcf for this period. Storage levels are now 8% below year-ago levels and, relative to the five-year average, 2.7% less. For the week ending tomorrow, an injection of 37 Bcf is expected.
In Canada, the October AECO 5a spot price averaged C$4.98/GJ, up C$1.44/GJ from September’s price of C$3.54/GJ. The Dawn index averaged C$6.16/GJ, up C$0.47/GJ from September’s average of C$5.69/GJ. Spot prices have more than doubled from this time last year, as demand has rebounded back to pre-pandemic levels, production remains relatively flat and strong exports persist. With the move away from coal-fired generation for power, the demand for natural gas continues to increase. Prompt-month futures for AECO are trading at C$5.59/GJ, while Dawn is trading at C$6.62/GJ. Prices have declined from last week’s highs, with week-over-week decreases of $0.58/GJ and $0.63/GJ at AECO and Dawn, respectively. Point Logic reports no change to Canadian natural gas storage for the week ending October 29th, remaining at 678 Bcf, 5.8% below the 5-year average and 14.4% below storage levels last year at this time. Canadian storage is 78% full, with Eastern storage levels now at 97% capacity and Western storage 70% full. No change in storage inventories is expected for the week ending November 5th.
– Karyn Morrison, Energy Advisor
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