According to Seeking Alpha, natural gas stocks went into this year’s winter season at their lowest level in three years, while inventories at the start of November stood at 3.79 trillion cubic feet, way below the levels at the start of the previous two years.
At the end of 2016, natural gas went to almost $4 per MMBtu, while at the end of this year’s trading season, it reached a high of $3.008 per MMBtu after a rally from lows of $2.562 on December 21.
This reversal in fortunes could very likely continue into 2018, seeing as we have three months of winter to look forward to. Additionally, the U.S. is exporting more natural gas. It is expected that the forecasted cold stretch into January will see priced buoyed well into the month because of inventory drawdowns.
A bumpy past year
It’s no secret that the Marcellus and Utica shale regions contain quadrillions of cubic feet of natural gas, and with all the gas being pumped, by March 2016, natural gas was at its lowest price since the 1990s, when it traded at $1.6110 per MMBtu.
With the glut of natural gas, particularly in the Northeast, it has brought the price of electricity down. PJM, the wholesale grid operator in Pennsylvania, Ohio, saw some of the lowest electricity prices in the region since they were tracked in 1999, dropping to $29.23 per megawatt hour.
However, any new pipelines in the works have been tied up by federal regulators for much of 2017. The Federal Energy Regulatory Commission (FERC) lost two of its members and didn’t have the needed quorum to rule on any projects. Replacements were not confirmed by the US Senate until August, holding up the approval of many new pipelines.
