North America gas markets weekly update: January contract drops below $4.20

Inventories have not been this low the fourth week of November since 2002. It appears most in the market believe the big rally a couple weeks ago was plenty bring the market back in balance. A large decrease in heating degree days, higher wind generation and more production growth will all stifle withdrawals in this coming report. A normal withdrawal this time of year is only 49 bcf. So the storage defiicit will continue to grow, but not as fast. Temperatures have warmed for much of the last week and gradual cooling should be coming over the next 10 days.