Weekly Energy Market Watch

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Jonathan Lee Senior Energy Market Intelligence Manager at ENGIE Impact
Energy Market
Natural Gas
Energy Prices
United States

Market Commentary | Week Ending 1/27/2023

Natural gas edges lower amid a widening storage surplus.

Monday 1/23

The Feb-2023 NYMEX natural gas contract pushed 27.3 cents higher to $3.447 per MMBtu on stronger demand expectations as weather forecasts called for a chilly pattern to set up in the Midwest during the first week of February. The Mar2023 WTI crude oil contract edged 2 cents lower to $81.62 per barrel even as Chinese Lunar New Year celebrations increased demand and after Russian oil shipments slowed. Equity markets landed in the green as investors prepared for a heavy week of quarterly corporate earnings results.

Tuesday 1/24

Natural gas struggled to sustain upside momentum as frigid air forecast for the Midwest for the first week of February would likely avoid much of the East. The cost of gas closed 18.9 cents lower at $3.258. Crude fell $1.49 to $80.13 on a weaker demand outlook after data revealed the manufacturing and service sectors contracted for the seventh straight month. Equities fluctuated between positive and negative territory as investors digested a mixed bag of fourth quarter corporate earnings from the manufacturing sector.

Wednesday 1/25

Natural gas lost 19.1 cents to settle at $3.067 ahead of the next day’s storage report, which was expected to show a draw around 80 Bcf that would move current levels to a surplus compared to last year. Oil prices gained 2 cents to close at $80.15 after the EIA reported a 0.5 million barrel increase in oil inventories. Stocks were mixed on the day after a major tech company reported slowing growth in their Q4 corporate earnings.

Thursday 1/26

Natural gas fell to its lowest level since mid-2021 after the EIA reported a lower-than-normal 91 Bcf draw from storage, which widened the surplus to the 5-year average to 128 Bcf. The front-month contract settled 12.3 cents lower at $2.944. Equities pressed higher after the Commerce Department estimated the economy grew 2.9% during the fourth quarter. Crude climbed 86 cents higher to $81.01 on demand optimism following U.S. economic growth data and China’s continued reopening of its economy.

Friday 1/27

The Feb-2023 NYMEX natural gas contract managed to claw back 16.5 cents before closing and expiring at $3.109 despite a loosening supply and demand balance. Oil shed $1.33 to land at $79.68 on reports Russian oil exports from its Baltic ports were set to rise 50% over December in order to meet strong Asian demand. Equities gained ground after the Federal Reserve’s preferred gauged on inflation slowed to its slowest pace since October 2021.

Looking Ahead

Natural gas prices will likely struggle to gain upside momentum until weather forecasts point to sustained cold in the major consuming regions.

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