NGAS prices soared on Wednesday’s session as Europe faced a cold weather forecast that would push the market up.
Natural gas futures for January delivery were trading higher by 3.60% to $5.67 apiece on December 07.
This bullish movement came ahead of the continent’s winter heating season that would test the inventories of NGAS.
Furthermore, temperatures in some parts are expected to fall below zero.
Additionally, weather experts predict that the intense cold during the week will impact Western Scandinavia and the UK.
Meanwhile, the southern part is anticipated to remain warm.
Last month, the frosty climate finally settled in Europe following a warm start for the heating season.
Due to the temperature shift, natural gas prices rose above $40.00 last week.
During that time, the storage capacity of NGAS declined to 91.00% from 94.00%.
According to an analyst, the elevated prices resulted in a gas consumption decline of about 25.00%.
However, the same movement made the commodity’s imports strong.
Earlier this year, the continent sold 10.60 metric tons of natural gas, which was higher by 10.00% from the previous month.
Similarly, NGAS contracts in Asia were up 1.10 metric tons per month, while Japan and China rushed for supplies ahead of winter.
EIA Expands NGAS Output Forecast
The US Energy Information Administration (EIA) raised its natural production forecast for 2023 due to the Permian Basin output.
In the EIA’s Short-Term Energy Outlook (STEO) on Tuesday, NGAS production for next year averaged 100.40 billion cubic feet per day (Bcf/d).
From December through March, the domestic output is predicted to be about 100.00 Bcf/d.
However, this amount came short by 0.50 Bcf/d from November due to weather-related disruptions.
According to researchers, dry NGAS production in the US for 2022 exceeds the pre-pandemic records.
For March 2023, EIA expects the demand to reach a new record close to 12.50 Bcf/d.
Likewise, it predicts an average NGAS export of 12.30 Bcf/d for the full year.
