Weather-Driven Market Activity

The natural gas markets have been highly volatile throughout the fourth quarter of this year, responding sharply to weather-related changes. Prices surged on news of severe weather and eased as conditions improved. For example, the hurricane and tropical storm season ended with minimal impact on Gulf Coast infrastructure. However, November brought temporary rig shutdowns, leading to a 10% jump in mercantile markets, followed by a swift easing once “all clear” announcements were made.

Monthly Settlements and Trends

• October 2024: NYMEX settled at $2.585, compared to $2.764 in October 2023.
• November 2024: Warmer-than-average temperatures across the Northeast and Midwest contributed to a settlement of $2.346, significantly lower than November 2023’s $3.164.

During November, news regarding LNG facilities—such as the Plaquemines facility and Cheniere Energy Inc.’s Corpus Christi stage 3 train—caused a brief jump in December futures. These facilities are expected to start liquefying gas by the end of 2024.

Northeast Basis and Volatility

The Northeast basis rose in anticipation of cold weather in the Northwest, Upper Midwest, and Northeast. As cold temperatures materialized, the last week of November saw extreme volatility, with prices jumping 10% on some days and easing 5%–10% on others. Each price run was mitigated by strong storage levels.

Storage Levels and December Settlement

The December 2024 settlement closed at $3.431, slightly above December 2023’s settlement. Robust storage levels nearing the 4 TCF mark—levels not seen since 2016—played a key role in moderating price activity. This storage strength helped maintain the 2024 annual average at $2.269, below annual averages since 2020, which settled at $2.077.

Looking Ahead to January 2025

January 2025 futures are trading between $3.10 and $3.30. As more news emerges about LNG facility liquefaction, market focus will shift from storage levels to production. Production is currently averaging 102.6–102.8 BCF/day, with demand slightly below this figure. However, additional feedgas requirements (2–3 BCF/day) for new and existing facilities will reduce this surplus.

The coming year is expected to bring significant attention to geopolitical issues and LNG export approvals and volumes. These factors will likely shape market dynamics and drive industry focus throughout 2025.