Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

In this list
Natural Gas

ANALYSIS: US Southeast winter gas supply outlook belies Henry Hub forwards, futures selloff

Natural Gas | Natural Gas (European) | Natural Gas (North American)

Evolving dynamics in the European natural gas market: A dive into Ukraine

LNG | Natural Gas | NGL

Platts LNG Alert

Electric Power | Renewables | LNG | Infrastructure Utilities

Caribbean Energy Conference, 21st

Natural Gas | Natural Gas (North American)

ANALYSIS: Northeast gas prices persist at record lows as mild weather pressures demand

Electric Power | Renewables | Natural Gas (North American) | Crude Oil | Steel | Petrochemicals

Commodity Tracker: 5 charts to watch this week

ANALYSIS: US Southeast winter gas supply outlook belies Henry Hub forwards, futures selloff


Dec, Jan and Feb forwards prices down 25 to 30 cents

Region's winter 2020-21 supply balance forecast tighten

Record storage level to end winter below 5-year average

After tumbling to a four-month low in recent trading, winter gas prices at the Henry Hub could be oversold judging from a recent market forecast published by S&P Global Platts Analytics.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

On Nov. 16, calendar-month forwards for December, January and February lost 25 to 30 cents, or about 8%, settling at $2.70, $2.86 and $2.85/MMBtu, respectively, data published by S&P Global Platts shows.

On Nov. 17, NYMEX futures prices for the same winter months were trading at similar levels on the Intercontinental Exchange, down another 1 to 2 cents from the prior-day's closing prices.

The precipitous decline in Henry Hub winter gas prices, which have largely traded at over $3/MMBtu since late July, comes as mild winter weather continues to blunt heating demand and as recent supply gains from Appalachia lift US production back toward 90 Bcf/d – its highest since May.

The forward market's focus on near-term fundamentals, and accompanying weakness in the cash market, could be overdone though. According to Platts Analytics, the Southeast will see a significant reduction in supply this winter that's forecast to leave regional storage significantly below last year's season-ending level.

Regional balance

During the upcoming winter months, the Southeast is expected to see modest declines in production compared to winter 2019-20. More critical is an anticipated drop to inbound gas coming from Texas. Combined, the two supply cuts are expected to leave the region net short by over 3 Bcf/d.

Most of the production decline in the Southeast this winter will come offshore fields, which will see output contract by about 300 MMcf/d from November to April, compared to last winter. Onshore declines in production should total just 100 MMcf/d, according to the analytics forecast.

A much larger decline for the Southeast will come in the form of lower net inflows. Following a more than 2 Bcf/d drop in Permian gas output this year, Texas producers are expected to cut gas transmission to the Southeast region by an average 2.9 Bcf/d from November to March.

This winter's supply cuts in the Southeast could be potentially exacerbated by lower demand.

A key factor in the Platts Analytics forecast is the Henry Hub gas price. At over $3/MMBtu, higher prices should incentivize significant gas-to-coal switching, resulting in a 1.1 Bcf/d drop in generator gas demand this winter compared to last. According to Platts Analytics, that decline should overwhelm an anticipated 850 MMcf/d gain in LNG feedgas demand and smaller seasonal increases in residential-commercial and industrial consumption.


Assuming supply and demand balances in the Southeast trend as forecast, the region could see its current record-high storage level significantly depleted by the end of this withdrawal season.

On Nov. 17, regional storage was estimated at nearly 579 Bcf – just 11 Bcf below the Southeast's record-high-level inventory level of 590 Bcf, recorded in early October, Platts Analytics data shows.

With drawdowns from storage expected to outpace last winter's level by an estimated 900 MMcf/d, inventories could end the withdrawal season below the five-year average and as much as 130 Bcf below last winter's season-ending level.

S&P Global Platts Americas Petroleum and Energy Virtual Conference | January 26-28, 2021

The conference provides comprehensive coverage of the entire energy slate. We’ll bring together an established community of petroleum players to network and discuss how the energy sector will reignite operations, reboot business models, and eventually reemerge post-pandemic.

Find out more