North America gas markets short-term outlook: Warm November erodes winter gas price premia

Winter is off to a slow start after a late October feint. After rising to near $3.40/mmbtu last month, the December contract is now about $0.70 lower (as of 18 November) and continues to be pressured due to mild weather. We think it's still too early to call off the winter, though. Outside of weather, fundamentals continue to support higher prices and indicate a significantly under-supplied gas market. • LNG feed gas deliveries are reaching new records • Mexican exports are higher than ever • Our industrial demand view has increased with a recovering GDP outlook. Meeting this demand is underperforming production, so there is still a mismatch that will come under pressure if weather even hints at turning colder.