August natural gas futures were on track to decline for a sixth straight session through midday trading Tuesday, undercut by cooler weather forecasts and weaker cash prices.
Here’s the latest:
- August Nymex natural gas futures down 3.9 cents to $2.439/MMBtu as of 2:22 p.m. ET
- Back of the curve higher after a federal court in Louisiana ordered the U.S. Department of Energy (DOE) to lift LNG permit pause
The August contract traded as low as $2.415 and as high as $2.453 in midday trading.
Further out on the Nymex forward curve starting for March 2025, contracts were trading modestly higher as far out as September 2026, possibly boosted by a favorable court ruling for unpermitted liquefied natural gas terminal projects.
U.S. District Court Judge James Cain of the Western District of Louisiana issued a preliminary order Monday for DOE to resume issuing non-free trade agreement permits for LNG export projects.
However, longer-term fundamentals are at stake. The seven commercially advanced projects affected by the permit pause were previously expected to come online around 2030. Those are among at least 17 LNG export projects proposed for the United States and Mexico with uncertain development timelines.
- Oversold technicals for August contract suggest potential for a bounce
The prompt month “is about as oversold as it gets,” according to NGI’s Pat Rau, senior vice president of Research & Analysis. After falling through key support at $2.50 on Monday, technical indicators point to a potential bounce for the August contract, Rau said.
“Technicals imply there is a chance that natural gas bounces from support and rallies to the $2.900 area, which would complete a beautiful head and shoulder formation,” said Mizuho Securities USA LLC’s Robert Yawger, director for Energy Futures.
- Production on Tuesday estimated at 100.7 Bcf/d, while Monday was revised higher to a new three-month high of 102.1 Bcf/d, Wood Mackenzie data show
- LNG feed gas demand slightly higher day/day at 12.15 Bcf, NGI’s U.S. LNG Export Flow Tracker shows
Monday’s U.S. LNG feed gas estimate, however, was revised lower to about 12 Bcf/d, partly due to a weaker reading for Cheniere Energy Inc.’s Sabine Pass LNG terminal.
After stronger weekend flows signaled Sabine Pass may have wrapped up its June maintenance, its feed gas deliveries have turned weaker. The terminal’s flows for Monday were trimmed slightly to about 4.1 Bcf and were estimated at around 3.6 Bcf on Tuesday, NGI data show.
Analysts had pointed to a force majeure Cheniere declared on its Midship Pipeline Thursday as a contributing factor to the weaker flows at Sabine Pass. However, Cheniere lifted it on Monday. Remediation work on the pipeline had constrained gas flows from Oklahoma to Louisiana.
- Cash prices sold off day/day, led lower by declines in California, according to NGI’s MidDay Price Alert
- Henry Hub spot price at $2.085, down 12.0 cents
- SoCal Border Avg. at $1.870, down 36.5 cents; PG&E Citygate off 62.0 cents to $2.835
Most of the southern two-thirds of the Lower 48 are expected to see highs in the upper 80s to 100s over the next two weeks, including “impressive heat” over California, NatGasWeather said.
Large swaths of California and the Southwest were forecast to see triple-digit temperatures Wednesday into the weekend, with some areas rising into the 110s and 120s, the National Weather Service (NWS) said. Portions of Texas and Oklahoma were expected to see highs above 100, while highs in the Southeast could reach the 90s over the long holiday weekend, NWS data showed.
Despite that heat, the California Regional Avg. shed 34.5 cents day/day to $1.965.
Meanwhile, Hurricane Beryl was expected to weaken as it approaches and passes Jamaica on Wednesday, however it would still be a major hurricane then and when it reaches Mexico’s Yucatan Peninsula, the National Hurricane Center said.
“The track of Hurricane Beryl will need close monitoring late in the week as there's potential it could impact South Texas late this weekend,” NatGasWeather said.
