After rallying Monday, natural gas futures eased lower through midday trading Tuesday as a faster pace of production reminded traders about stubbornly high storage surpluses.
Here’s the latest:
- August Nymex natural gas futures down 6.7 cents to $2.184/MMBtu as of 2:24 p.m. ET
- Late-cycle revisions raise Monday’s Lower 48 production to 102.7 Bcf/d, with Tuesday initially at about 102.4 Bcf/d, per Bloomberg data
NatGasWeather on Tuesday said the reasons for the slide in prices were “difficult to pinpoint,” but bears could have been stepping in to short the recent bounce. The weakness also was attributed to stout storage surpluses and added volatility ahead of the expiration of August Nymex options and futures this coming Friday and Monday, respectively, the firm said.
Additionally, the Lower 48’s No. 1 natural gas producer EQT Corp. and another big gas operator, Range Resources Corp., were set to release second quarter reports on Wednesday. The companies were expected to provide updates on planned output and possibly impact market sentiment, an analyst told NGI.
- Ample storage buffer seen shrinking slightly with this week’s inventory data on Thursday
- NGI modeling an 11 Bcf injection for the week ending July 19
According to data from the U.S. Energy Information Administration, the five-year average injection for the latest storage period is 31 Bcf, with a year-earlier build of 23 Bcf. Total Lower 48 working gas in underground storage stood at 3,209 Bcf as of July 12, or 465 Bcf higher than the five-year average.
- Deliveries to U.S. LNG terminals rising to about 12.5 Bcf/d Tuesday, per NGI’s U.S. LNG Export Flow Tracker
Flows to domestic liquefied natural gas export facilities on Monday were revised higher to slightly above 12 Bcf. That marked the first time they have exceeded that level since former Hurricane Beryl.
Freeport LNG Development LP was scheduled to receive about 1.3 Bcf/d for Tuesday, suggesting the terminal was ramping up a second train as it repaired damage caused by Beryl.
Further south on the Texas coast, deliveries to Cheniere Energy Inc.’s Corpus Christi terminal were up 0.5 Bcf/d day/day to about 2.3 Bcf/d with the end of upstream maintenance.
- Cash prices averaging modestly higher, with spot gas National Avg. up 2.5 cents day/day to $1.845, according to NGI’s MidDay Price Alert
- Waha staying above zero for second day, up 7.0 cents to 45.0 cents
A mechanical failure along Transwestern Pipeline Co. LLC’s pipeline in New Mexico cut flows from West Texas and the Panhandle on Monday. Most of the impact was a 100 MMcf/d drop in West Texas, Wood Mackenzie analyst Nadeem Ahmed said. On Tuesday, the pipeline indicated capacity was still constrained from West Texas.
Separately, El Paso Natural Gas Co. LLC was scheduled to perform tests at its Blue Water Station Tuesday that could reduce Permian Basin flows by about 170 MMcf/d west through New Mexico.
