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Blue Lacy Advisors, LLC – January Natural Gas Market Commentary

Minneapolis, MN | January 17, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC


Prompt Henry Hub has dropped nearly 20% in the three trading days of January. It is now trading around $3.70, more than 60% of the high close of the year ($9.68). The bearish trend seems to accelerate each week. Keep in mind, these prices are in line with December 2021 and possibly closer to “normal” than the highs observed in the peak risk of August, much in the way crude oil prices falling from $125+ may be attributed to falling risk premium. Unfortunately, weather forecasts don’t hold much hope for a reversal of the benchmark losses. This week’s temperatures are in line with forecasters’ warm expectations, coming in 5°F above normal, resulting in daily demand as low as 84 Bcf/d (down >20 Bcf/d from the week of 23 Dec 22). Temperatures across the country are expected to cool next week and cause demand to rebound to the mid-90s Bcf/d. But much of last week’s massive draw was caused by production freeze-offs, which have recovered to within 0.4 Bcf/d of their pre-freeze level, so cooler temps will likely result in more typical seasonal flows.

*This summary is based off January 5, 2023

A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


Meet the Author!

Phone: +1-832-413-3124

Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.

He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.

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