Natural gas futures closed near flat after gyrating on both sides of even Friday as a foot race between hot summer demand and rising production continued to play out in setting market balances.
At A Glance:
- Seven-day average output at 102.5 Bcf/d
- Golden Pass LNG delayed until late 2025
- Blistering heat through early next week
The September Nymex contract settled at $1.967/MMBtu, down 0.1 cent day/day. The contract traded across a 10-cent span Friday.
NGI’s Spot Gas National Avg. slipped 14.0 cents to $1.665. Prices were weaker in all regions, led lower by hubs in West Texas that sank further into the negative.
“Fundamentally, there is concern over an upturn in production over the past week as even very hot weather today has been unable to raise Henry Hub spot prices,” according to EBW Analytics Group’s Eli Rubin, senior analyst. Downside risks abound, he said. “Natural gas is only one hurricane or weather collapse from another leg lower.”
NGI’s Henry Hub cash prices have grinded lower by around a dollar this summer since topping out at $2.800 in early June. The hub averaged $1.890 on Friday, after bottoming out earlier in the week at $1.800.
On Friday, early pipeline nominations showed Lower 48 production stood at 101.8 Bcf/d, Wood Mackenzie data show. The pattern has been that later readings would revise the estimate higher. Output rose to 103.2 Bcf/d on Wednesday, its highest level in five months.
On the demand side, LNG feed gas nominations bounced 1 Bcf/d higher to about 13.2 Bcf/d on Friday, according to NGI data. That increase included the Freeport liquefied natural gas terminal, which is set to run at its fastest pace since March 2023, NGI data show. The Texas facility was scheduled to receive about 2.26 Bcf of feed gas on Friday.
Overall, the summer has been one of the hottest on record, with cooling demand the highest in records back to 1950, according to Maxar’s Weather Desk meteorologist Bradley Harvey. June was the hottest for its month and July was the sixth hottest, Harvey said Friday on online energy platform Enelyst.
Forecasts for August have cooled, but they still show plenty of heat. Maxar expects August to rank in the top 10, with the first half of the month trending as eighth hottest, Harvey said.
The models turned more confident on the likely path of an Atlantic tropical cyclone that “brings the threat for heavy rain to Florida this weekend and elsewhere along the East Coast next week,” Harvey said.
LNG Updates
The market late this week received a slew of updates on LNG terminals in development that adjusted market expectations.
On Friday, ExxonMobil said the Golden Pass LNG terminal on the upper Texas coast would be delayed until the second half of 2025. Work is restarting at the project site after one of the primary contractors, Zachry Holdings Inc., exited the project. Cost overruns forced it into bankruptcy and upended the construction timeline.
Also on Friday, New Fortress Energy Inc. (NFE) said it expected to complete the commissioning process of its Fast LNG facility offshore Altamira in Mexico in early August. NFE could ship its first LNG cargo by mid-August, it said.
On Wednesday, LNG Canada said it “intends to begin flaring in August and is on track to ship the first LNG cargo from British Columbia by the middle of 2025.” The update from Canada’s first LNG export terminal came weeks after one of its lead engineering firms said the project was nearing its commissioning phase.
Cheniere Energy Inc. on Wednesday asked federal regulators to approve “a key step in the process for beginning the liquefaction commissioning process” at the Corpus Christi LNG Stage 3 facility, according to Criterion Research Inc.’s James Bevan, vice president of Research. Cheniere expects the South Texas project to begin producing LNG before the end of the year and have all seven trains online by the end of 2026.
Rounding out the projects on the market’s radar, Venture Global LNG Inc.’s Plaquemines terminal in Louisiana is periodically receiving feed gas deliveries as it works toward start up and tests pipeline infrastructure.
Spot Prices Stumble
Physical cash prices sank Friday for deliveries over the weekend and Monday.
The Southeast Regional Avg. dropped 15.0 cents day/day to average $1.955 ahead of the looming tropical storm that is expected to dampen the region’s cooling demand.
Among the leading decliners, Waha slumped $1.065 to average at a negative $1.145. West Texas prices have traded in the negative amid a glut of supply caused by pipeline constraints.
Relief is on the way in the form of the 2.5 Bcf/d Matterhorn Express Pipeline expected to come online later this year. On Thursday, a consortium of operators that own the Whistler system added another pipeline to the mix. The 2.5 Bcf/d, 365-mile Blackcomb Pipeline would move forward, with its first flows to the Agua Dulce hub in South Texas expected by the second half of 2026.
Elsewhere, price moves were more modest. Chicago Citygate in the Midwest shed 8.5 cents to $1.740.
However, moves were more pronounced in some regions. Northwest Sumas in the Rockies fell 32.0 cents to $1.650. PG&E Citygate in California was down 24.0 cents to $3.395.
NatGasWeather said both the American and European models on Friday advertised “very strong national demand through” the weekend and into the week ahead “as hot high pressure rules most of the U.S. with highs of upper 80s to 100s.”
