August natural gas futures were on track for their seventh straight loss through midday trading Wednesday after the latest in-line weekly storage injection was accompanied by a bearish revision to the previous week.
Here’s the latest:
- August Nymex natural gas futures down 2.2 cents to $2.413/MMBtu as of 2:24 p.m. ET
- U.S. Energy Information Administration (EIA) reports a seasonally light build of 32 Bcf for the week ending June 28
The August contract initially sold off after the EIA’s noon print, but quickly recovered to trade positive. Complicating traders’ initial read of the data was a 5 Bcf upward revision to the previous week’s injection. However, by 1:40 p.m. ET, those gains had been erased.
The latest print landed near a Reuters survey’s median expectation of a 33 Bcf increase. NGI had modeled a 29 Bcf build. The injection was well below the 69 Bcf five-year average.
Total Lower 48 working gas in underground storage exited the period at 3,134 Bcf. That’s 496 Bcf above the five-year average, or an 18.8% surplus, but down nearly 2 percentage points from the previous week.
“Can’t quite call this a bearish print,” said The Desk’s John Sodergreen, editor-in-chief, two minutes after the release when futures were initially reacting negatively.
- Hurricane Beryl showing a possible path toward South Texas early next week, but at a lower intensity
Beryl’s eyewall was expected to pass south of Jamaica over the next six to 12 hours on its way to striking Mexico’s Yucatan Peninsula on Friday, the National Hurricane Center (NHC) said in an 11 a.m. ET update.
After that, NHC said “there remains uncertainty in the track and intensity forecast of Beryl over the western Gulf of Mexico this weekend. Interests in the western Gulf of Mexico, including southern Texas, should monitor the progress of Beryl.”
NHC said Beryl would weaken more over the Yucatan, “then slowly re-intensify over the Gulf of Mexico in a somewhat more favorable environment. The intensity forecast again calls for the cyclone to regain hurricane strength before it reaches the western Gulf coast.”
- Cash prices generally lower day/day, according to NGI’s MidDay Price Alert
- Henry Hub spot price at $2.050, down 3.5 cents
- Waha at negative $3.815, down $1.935
- Wednesday weather forecasts continue string of cooler reads for Lower 48
Weather forecasts overnight shed 2 cooling degree days (CDD) for the week starting Friday and another 3 CDD for the subsequent week, according to forecaster DTN.
“Texas will cool a few degrees this weekend due to a weather system tracking across the Plains, as well as from likely showers from approaching Beryl, but still very warm overall,” NatGasWeather said.
On the demand side, Wednesday’s U.S. LNG feed gas estimate ticked higher by 0.2 Bcf/d to around 12.2 Bcf.
Flows to Cheniere Energy Inc.’s Sabine Pass liquefied natural gas export terminal jumped by 0.6 Bcf/d day/day to a more normal pace of about 4.3 Bcf/d. That was more than offset by a 0.7 Bcf/d drop in flows to Cheniere’s Corpus Christi LNG terminal, according to NGI’s U.S. LNG Export Tracker.
Freeport LNG terminal feed gas flows for Wednesday were estimated up by 0.2 Bcf/d to about 1.9 Bcf/d. The Corpus Christi and Freeport facilities are the most vulnerable to a South Texas hurricane strike.
“We’re only a few days into July, but the current pacing of feed gas is tracking 0.63 Bcf/d below June rates,” Criterion Research Inc.’s James Bevan, vice president of Research, said on online energy platform Enelyst. “LNG is just underperforming.”
