Natural gas futures hovered in a narrow range early Tuesday, with traders assessing the impacts of the former Hurricane Debby and mixed weather forecasts.
The September Nymex gas futures contract was up three-tenths of a cent to $1.945/MMBtu at around 8:40 a.m. ET.
While intense heat is forecast to further permeate large sections of the South and West, National Weather Service (NWS) data showed cooler air and highs in the upper 60s to 70s spanning the Northern Plains through the Great Lakes Wednesday. Such conditions were expected to last into next week.
In the Southeast, meanwhile, the aftereffects of the former Hurricane Debby were projected to linger throughout the week. Debby made landfall early Monday in Florida as a Category 1 storm, delivering drenching rains and flooding on top of hundreds of thousands of power outages. Now a tropical storm, it could track up the coast to the Northeast this week, bringing cooler temperatures along with it, NWS data showed.
“The storm is forecast to move northeast and retain most of its strength, potentially affecting much of the East Coast as it moves,” Gelber & Associates analysts said.
On the supply side, Wood Mackenzie estimated natural gas production on Tuesday at 100.4 Bcf/d, down from the seven-day average of 102.5 Bcf/d because of planned maintenance work in the Permian Basin and Northeast. Still, the firm estimated output over the coming seven days would return to an average of 102.5 Bcf/d.
Gas in storage, meanwhile, was poised to remain well above average into August.
For Thursday’s Energy Information Administration (EIA) inventory report, covering the week ended Aug. 2, early injection estimates submitted to Reuters averaged 30 Bcf, matching NGI’s prediction. The estimates compared bullishly with a five-year average increase of 38 Bcf, but not by enough to put a big dent in the storage surplus.
Underground stocks finished the last full week of July at 3,249 Bcf – 16% above the five-year average, according to EIA.
What’s more, broader stock and commodity trading activity remained in focus early Tuesday.
Fresh concerns about a potential U.S. recession, spurred by a relatively lean jobs report last week, ignited a global stock and commodity slump over the course of trading late last week and through Monday. The Labor Department on Friday reported that U.S. employers added 114,000 jobs in July, well below the 215,000 average of the prior 12 months.
Raymond James trader Doug Drabik said the Federal Reserve’s aggressive interest rate hikes over the past two years to tame inflation had worked, with the pace of consumer price increases shaved by two-thirds since 2022. But high borrowing costs also raised fears of a pending downturn.
“The catalyst was Friday’s unexpectedly disappointing unemployment number,” Drabik said. “Investors have turned their worry about inflation into worry about a recession.”
The threat of a widening war in the Middle East added to tensions. China’s economy also shows signs of weakness, according to Rystad Energy analysts.
Major U.S. stock indexes, however, were up early Tuesday. Brent crude, often linked closely to economic sentiment, see-sawed in early trading and was struggling for momentum after a steep slump in recent days.
