High gas withdrawals from the South Central Region (SCR) of the United States have boosted prices at the Henry Hub so far during the 2016-2017 gas withdrawal season. The situation is expected to persist in February, when average temperatures across the US are expected to be colder than during the same month last year.
The US entered the current withdrawal season with a gas glut that was even more severe than at the start of the previous withdrawal season. Meanwhile, the weather has been milder during January on an annual basis. However, this is not reflected in the Henry Hub front-month futures price, which has averaged $3.25/MMBtu so far during the season – much higher than the $2.19/MMBtu average seen during the same period last year. GGA forecasts the price to average $3.9/MMBtu in February 2017 compared with $1.93/MMBtu in February 2016.
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