The NYMEX December natural gas futures contract jumped 49.2 cents to $4.593/MMBtu in Wednesday morning trading, the largest day-on-day increase since February 2014 and the highest prompt-month price since June 2014.
In overnight trading, the NYMEX December contract increased 82.8 cents, the largest intraday gain in the prompt-month contract dating back to October 29, 2009, when the contract increased 84 cents in intraday trading.
The December contract traded between $4.05/MMBtu and $4.929/ MMBtu Wednesday, a range of 87.9 cents. This is the largest range since February 24, 2014, when it traded between $5.38/MMBtu and $6.493/MMBtu, a range of $1.113. Wide ranges of 90 cents-$1/MMBtu occurred over a few trading days from July-September 2008.
S&P Global Platts Analytics data showed Wednesday demand may be the peak for the moment, with total US demand forecast at 111 Bcf. Forecasts showed total US demand dropping to 100.5 Bcf/d for the next seven days to 93.6 Bcf/d eight to 14 days out.
Wednesday's peak comes as LNG feedgas demand hit an all-time high at 4.7 Bcf/d, with 300 MMcf/d coming mostly from increases in feedgas deliveries to Sabine Pass. LNG feedgas demand could be revised up further as first LNG production begins at Cheniere's Corpus Christi liquefaction facility Wednesday.
"It's going to be a wild ride so buckle up," said Phil Flynn, market analyst at Price Futures Group.
Flynn said several factors influenced Wednesday's strong gains, "from weather turning colder, to the market freaking out about storage and participants that got caught the wrong way covering their shorts."
