January 2024 Natural Gas Market: Price Fluctuations and Influencing Factors

Opening Prices and Storage Report Analysis

The prompt month for natural gas opened on Thursday, January 18, 2024 at $2.824, lower than Wednesday’s close of $2.870. The storage report for week ending January 12 showed a 154 BCF withdrawal, which was much lower than analysts expectations of 176 BCF. The market sold off throughout the day for not only the prompt month of February 2024, but also all futures going out to 2025. As of January 12, the report showed that storage volumes are 12.4% higher than this same time last year, and are 11.2% above the 5-year average which is something not seen in a long time. The market closed out Thursday with the February 2024 future breaking through $2.70 to close at $2.697.

Subsequent Market Developments

As market trading opened on Friday, January 19, 2024 the market has continued its sell off for not only prompt month, but futures going out through end of 2025 as well. As of 10:15AM, Friday, January 19, 2024, prompt month has sold off to $2.595, an additional drop of 3.78%. As an indicator of the strength of the current storage, and a lack of impeding volatile weather January, 2025 has broken through $4.00. The January 2025 future is currently down 2.16%, off 8.7 cents from Thursdays close. January 2025 is at $3.933.

Impact of Weather Conditions

One item to note is the amount of well heads that are frozen in the US this week, and the very low temperatures caused by a polar vortex in the south, and mid west. North west and north east temperatures are equally frigid, and we are expecting to see a significant storage withdrawal reported on Thursday January 25 for week ending January 19. With robust storage volumes, and a return to milder temperatures next week, it will be very intriguing to see the market’s reaction to a strong expected withdrawal.