In a pure gasoline targeted EBW Analytics Group report despatched to Rigzone by the EBW crew on Friday, Eli Rubin, an power analyst on the firm, warned that late December heating demand “continues to disintegrate”.
“Yesterday’s 177 billion cubic foot withdrawal did little to cease the large sell-off in pure gasoline, with the NYMEX front-month plummeting to shut at a seven-week low of $4.231 [per million British thermal units (MMBtu)],” Rubin mentioned within the report.
“Though a frigid early December could erode storage surpluses over the subsequent two EIA [U.S. Energy Information Administration] studies, the market is concentrated on eroding late-December heating demand,” he added.
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Within the report, Rubin famous that the week main into Christmas “shed one other seven gHDDs over the previous 24 hours, with exceptionally delicate climate anticipated throughout the nation within the again half of the month”.
“Each day demand should surge into Sunday’s peak – however is anticipated to plunge 26 billion cubic ft per day [Bcfpd] into mid-next week, probably delivering a blow to bodily gasoline costs,” he added.
Rubin went on to warn within the report that technicals additionally seem weak, “with costs falling beneath the 20-day, 50-day, 100-day and 200-day shifting averages”.
“Shorts could take income off the desk forward of the weekend, and medium to long run fundamentals seem extra supportive than current value motion suggests, however momentum is bearish and this week’s 133 billion cubic foot lack of weather-driven demand will depart a permanent mark on NYMEX futures,” he mentioned.
This EBW report highlighted that the January pure gasoline contract closed at $4.231 per MMBtu on Thursday. It outlined that this was down 36.4 cents, or 7.9 p.c, from Wednesday’s shut.
In an EBW report despatched to Rigzone by the EBW crew on December 10, Rubin highlighted {that a} “climate collapse plunge[d]… pure gasoline into freefall”.
“The January pure gasoline contract plummeted to $4.455 early this morning – a $1.041 implosion from Friday’s intraday excessive – as late December continues to hemorrhage demand,” Rubin mentioned in that report.
“Since Friday, Week 3 has shed 42 gHDDs, with preliminary forecasts for a chilly finish to 2025 flipping to a blowtorch resolution for many of the Decrease 48,” he added.
“Week over week demand could shed 9.5 Bcfpd into Week 3, with a counter-seasonal warmup negating final week’s provide considerations,” he continued.
“Nonetheless, Henry Hub spot costs cleared at $4.76 per MMBtu with day by day heating demand to leap 15.6 Bcfpd into the weekend. Weekly common LNG is at a report excessive, manufacturing readings are declining, and the storage surplus vs. five-year common could disappear into early 2026,” he famous.
On this report, Rubin went on to state that, “though it’s troublesome to determine when climate fashions will cease shedding demand and promoting strain will stop, the medium-term elementary outlook is sounder than early-week value motion suggests”.
Rubin additionally warned that “climate forecast evolution will proceed to play a dominant function within the value trajectory for NYMEX gasoline futures”.
This EBW report highlighted that the January pure gasoline contract closed at $4.574 per MMBtu on Tuesday. The report outlined that this was down 33.8 cents, 6.9 p.c, from Monday’s shut.
In one other EBW report despatched to Rigzone on December 11, Rubin famous that the “Week 3 weather-driven demand collapse” was persevering with.
“The NYMEX front-month staged a half-hearted 2.1 cent bounce yesterday – with the dearth of a extra sizable aid rally relative to the 71.5 cent early-week collapse a cautionary sign,” Rubin mentioned in that report.
“The continuing Week 3 climate collapse stays a bearish weight on the near-term outlook,” he added.
On this report, Rubin mentioned “consensus expectations” for that day’s EIA storage report “span 165-174 billion cubic ft”.
“The primary sizable storage pull of the 12 months usually contains linepack to bias withdrawals higher-and pipeline flow-derived attracts additionally trace at dangers of a doable bullish shock,” he added.
Rubin highlighted on this report that “LNG feedgas figures have ticked decrease” however added that the “overwhelming catalyst stays the 116-billion cubic foot collapse in demand since Friday”.
“Heating demand could surge 16 Bcfpd into the approaching weekend, solely to break down 25 Bcfpd into the center of subsequent week,” he warned.
“Though medium-term fundamentals seem supportive, if late-December climate doesn’t stabilize, additional near-term draw back can’t be dominated out,” he went on to notice.
On this report, EBW highlighted that the January pure gasoline contract closed at $4.595 per MMBtu on Wednesday. The report outlined that this determine was up 2.1 cents, or 0.5 p.c, from Tuesday’s shut.
In its newest weekly pure gasoline storage report, which was launched on December 11 and included information for the week ending December 5, the EIA acknowledged that working gasoline in storage was 3,746 Bcf as of Friday, in line with its estimates.
“This represents a web lower of 177 billion cubic ft from the earlier week,” the EIA mentioned on this report.
“Shares had been 28 billion cubic ft lower than final 12 months presently and 103 billion cubic ft above the five-year common of three,643 billion cubic ft. At 3,746 billion cubic ft, whole working gasoline is throughout the five-year historic vary,” they added.
To contact the creator, e mail andreas.exarheas@rigzone.com
