Afforded little support from the latest storage data for a definitive move in either direction, August Nymex natural gas futures meandered near unchanged through midday trading on Thursday.
Here’s the latest:
- August futures were off 2.2 cents to $2.723/MMBtu at 1:35 p.m. ET. The prompt month traded between an intraday high of $2.784 and a low of $2.687
- 52 Bcf storage build reported for the week ended June 21
The U.S. Energy Information Administration (EIA) inventory report outlined the storage injection, which aligned with estimates ahead of the print.
The build lifted inventories to 3,097 Bcf, keeping stocks above the year-earlier level of 2,783 Bcf and the five-year average of 2,569 Bcf.
The surplus to the five-year average declined by two percentage points from the prior week to 21%. However, East Daley analyst Jack Weixel said on the online energy platform Enelyst that “the slowdown in storage injections is both a fundamental and physical requirement.”
Weixel said, if inventories were to draw down even at the five-year average pace through the injection season, storage facilities in the East, Mountain, Pacific and Midwest “would all go over demonstrated peak capacity.”
Analysts were anticipating another seasonally light increase in the next EIA print.
Early injection estimates submitted to Reuters for the week ending June 28 ranged from 13 Bcf to 76 Bcf, with an average of 41 Bcf. The average estimate compares with a five-year average increase of 69 Bcf.
Updated weather forecasts at midday confirmed extreme heat across most of the country through mid-July.
Meanwhile, developments on the LNG front Thursday supported the expectation of increased natural gas flows to domestic liquefied natural gas facilities.
Texas Eastern Transmission LP began delivering natural gas volumes to the Gator Express Gas Pipeline on Wednesday, according to Wood Mackenzie. The pipeline feeds gas to the Venture Global LNG Inc.’s Plaquemines export terminal in Louisiana. The firm’s real-time monitoring showed that about 2.9 MMBtu was received at the facility through Gator Express in Parish, LA.
“These relatively small volumes appeared to be the test of the pipeline infrastructure,” Wood Mackenzie analyst Nadeem Ahmed said. Exports from the facility were expected to start later this year.
In other news, Venture Global’s 20 million metric tons/year CP2 export facility received final federal approval, ending a more than 10 month wait for authorization.
The project, near Venture Global’s Calcasieu Pass LNG facility, requires U.S. Department of Energy (DOE) approval to pursue export authorization. In January, the DOE paused new authorizations for LNG exports.
At the same time, Lower 48 natural gas production was holding above 100 Bcf/d. It is an improvement from the mid-90s Bcf/d in the spring, but below record levels of around 107 Bcf/d.
Natural gas still “can’t seem to get a handle on which way the wind is blowing,” Price Futures Group analyst Phil Flynn told NGI. “While production is down and demand is up, some producers might start to ramp up production, and temperatures could cool down, causing some uncertainty about advancing prices much higher.”
Flynn said, “On top of that, the hot weather that has driven demand in many parts of the country may ease, and the other issue with natural gas is just what may happen as far as tropical activity develops in the Gulf of Mexico.”
The National Hurricane Center (NHC) was monitoring two disturbances on Thursday. NHC said that a broad area of low pressure over the western Caribbean was producing widespread but disorganized showers and thunderstorms. It was moving west-northwestward, with a 10% chance of further development through Saturday.
Additionally, NHC said a tropical wave several hundred miles west-southwest of the Cabo Verde Islands had a 60% chance of developing into a tropical storm through the weekend.
- Spot gas prices – for delivery June 28-30 – mostly lower; NGI’s Spot Gas National Avg. down 37.0 to $1.655
- NGPL Midcontinent off 18.0 cents to $1.875
- Dawn off 23.0 cents to $1.890
The National Weather Service (NWS) forecast severe thunderstorms and damaging wind gusts across portions of the central and northern Plains through late Thursday. The system was expected to move east on Friday, bringing storm chances to the Mississippi Valley and Great Lakes regions.
NWS said shower and storm chances Friday should bring some relief from intense heat in the Lower Mississippi Valley and Southeast. However, coastal Georgia through the Carolinas was expected to “stay hot, with highs in the mid-90s and heat indices potentially reaching into the low 100s.”
