North America gas weekly update: persistent warmth keeps prices low

Persistently warmer than normal weather conditions are continuing to take Henry Hub prices lower for longer. Despite positive fundamental signals, especially declining US gas production since the end of November, ultimately winter weather needs to help to revive prices from the abyss or even falling deeper. January and February are typically one of the coldest months of the year where record weekly storage withdrawals occur. During the bomb cyclone impacted week ending 5 January 2018 a record -359 bcf withdrawal occurred. In comparison, for the week ending 3 January 2020 we estimate only a -49 bcf withdrawal to be reported. That’s -310 bcf less withdrawals just for a single week and highlights what a very extreme cold week can result in. For now, even a normal winter weather close out would be much supportive of North America gas markets.