Natural gas futures continued to soar through midday trading Monday, with warm May temperatures hinting at upcoming summer cooling demand to keep bulls firmly in control.
Here’s the latest:
- June Nymex futures at $2.741 at around 2:10 p.m. ET, up 11.5 cents
Speculators as a group covered short positions during the week ended May 14, according to an analysis of Commodities Futures Trading Commission Commitments of Traders data conducted by StoneX Financial Inc.’s Thomas Saal, senior vice president of energy.
Professional speculators trading select Nymex natural gas products exited the period net short by 114,639 contracts, reducing their net short position by 19,136 contracts week/week, according to Saal’s analysis.
- Temperatures seen driving above-normal cooling demand over next two weeks, per Maxar
Maxar meteorologist Brad Harvey, during a discussion on Enelyst, said the forecaster was expecting 93.1 population-weighted cooling degree days over the 15-day projection period.
This is “not only above normal…but would rank as the 10th highest total for the period among national records dating back to 1950,” Harvey said.
- Cash prices surging in the Southeast amid early season warmth, pipeline maintenance
- Transco Zone 4 up 75.0 cents to $3.690, per NGI’s MidDay Price Alert
- Florida Gas Zone 3 averaging $3.760, up 57.0 cents, MidDay Price Alert data show
Population centers in the Mid-Atlantic and Southeast should see warmer than normal temperatures this week, according to recent projections from Maxar. The forecaster predicted highs in the mid- to upper 80s in Washington, DC, Philadelphia and Atlanta over the next few days.
This coincides with pipeline maintenance that has been disrupting flows between the Gulf Coast and Southeast. Transco, aka the Transcontinental Gas Pipe Line Co., late last week advised shippers to expect continued restrictions at its Station 60 compressor in Louisiana.
Earlier this month, operational capacity flowing south to north through this location dropped from 1,600,000 MMBtu to 775,000 MMBtu, and scheduled volumes have been butting up against that reduced level ever since, Wood Mackenzie flow data show.
Elsewhere, Southern Natural Gas (SONAT) had a force majeure in effect for gas days Monday through Thursday tied to maintenance on the Southeast Supply Header (SESH) system, according to Wood Mackenzie analyst Inigo Guerra.
According to Guerra, available capacity through the interconnection between SONAT and SESH in Missouri was expected to be reduced from 504,150 MMBtu/d to 456,000 MMBtu/d for Tuesday and Wednesday, with capacity expected to increase to 482,000 MMBtu for Thursday.
“Nominations for the interconnect between SESH and SONAT have been near or at max operational capacity for almost all days this past month,” Guerra said.
