A slight rise in demand Tuesday provided impetus for the NYMEX January natural gas futures contract and the rest of the winter to rebound Tuesday after five straight days of exploring the downside.
The NYMEX January contract settled at $3.838/MMBtu, up 31 cents from Monday's close of $3.528/MMBtu.
Monday's settle was the lowest for a front-month contract since November 2 at a $3.31/MMBtu close.
Other monthly contracts for the balance of the winter followed the same path, with February increasing 28.90 cents to $3.742/MMBtu and March increasing 25 cents to $3.558/MMBtu.
The fall of the winter contracts began early last week.
On December 10, January settled at $4.545/MMBtu, but the decline started December 11 as the prompt-month closed that session at $4.407/MMBtu. From there, it was a freefall until Monday, when the front-month ended the day at $3.528/MMBtu.
All told, January slipped $1.017 over the five trading days.
After a cold November, December demand has been lower than expected. So far this month, US consumption has averaged 94.1 Bcf/d, but over the last six days demand has averaged 86.55 Bcf/d, according to S&P Global Platts Analytics.
The outlook for Tuesday saw demand at 92.3 Bcf, but consumption is forecast to decline for the next two weeks, averaging 88.9 Bcf/d for the next seven days and then 89.3 Bcf/d the week after.
The decline in demand is rooted in a forecast calling for higher-than-normal temperatures in major demand areas of the Northeast and Upper Midwest for the next two weeks plus the impact of the holiday season.
The tempering of demand so far in December has kept withdrawals from storage on the low side.
Tuesday's expected pull of 13 Bcf would put the seven-day average at 8.27 Bcf/d.
Overall, December draws have averaged 14.2 Bcf/d. In the year-ago period, withdrawals averaged 16.9 Bcf/d.
"Natural gas is getting crushed as warm temperatures are easing fears of a storage shortage this winter," one analyst said Tuesday.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (2300 GMT).
