Natural gas futures advanced early Wednesday and kept momentum rolling through midday trading. The prompt month headed for a second daily advance. The cash market posted modest gains in most regions, meanwhile, though West Texas showed customary losses as supplies backed up amid maintenance work.
Here’s the latest:
- September Nymex natural gas contract trading up 10.0 cents to $2.110/MMBtu as of 2:40 p.m. ET
- Cash prices at Henry Hub averaging $1.985, up 14.5 cents, according to NGI’s MidDay Price Alert
- West Texas benchmark Waha drops 30.0 cents to average negative 37.0 cents
Analysts attributed the futures advance to weaker production readings this week, as well as expectations for a bullish storage print on Thursday from the U.S. Energy Information Administration (EIA).
Wood Mackenzie estimated natural gas production at 100.5 Bcf/d Wednesday, down from the seven-day average of 102.3 Bcf/d. Repair and inspection work in Appalachia, the Rockies and Texas contributed to the decline.
“Signs of lower natural gas production are a supportive near-term development,” EBW Analytics Group’s Eli Rubin, senior analyst, said. The “possibility of a second straight bullish report on Thursday could jump-start” further price support.
For EIA’s inventory report covering the week ended Aug. 2, NGI modeled a 30 Bcf injection. An updated Reuters poll Wednesday found estimates ranging from increases of 16 Bcf to 35 Bcf, with a median of 26 Bcf.
The median expectation was notably below the five-year average build of 38 Bcf.
EIA previously reported an injection of 18 Bcf for the week ended July 26 – bullish relative to the five-year average build of 33 Bcf.
- U.S. LNG export terminals scheduled to receive around 12.0 Bcf of feed gas Wednesday
Demand from U.S. liquefied natural gas facilities held even with the prior day and showed no major signs of negative fallout from tropical storm activity this week, according to Wood Mackenzie’s Wednesday assessment. There are key terminals in Georgia and Maryland, areas affected by the remnants of former Hurricane Debby.
Freeport LNG was knocked offline more than a week in July following Hurricane Beryl, but export activity has held up in the wake of Debby. Wood Mackenzie pegged feed gas volumes for the coming seven days at 12.4 Bcf/d – up about 2 Bcf/d from July lows.
[Want to visualize Chicago Citygate, Henry Hub, Houston Ship Channel or any of our 170+ spot natural gas price indexes? Check out NGI's daily natural gas price snapshots now.]
Meanwhile, cash prices advanced in most regions, though a mixed weather outlook kept gains modest.
- Chicago Citygate ticks up 3.0 cents to average $1.755 at midday
- Algonquin Citygate near Boston advances 3.5 cents to $1.475
NatGasWeather noted that, while Debby was downgraded to a tropical storm, it continued to deliver “bearish demand destruction across the Southeast due to cooler temperatures and power outages.”
The firm also noted seasonally mild high temperatures in the upper 60s and 70s taking hold over “greater portions of the Midwest, Plains, Ohio Valley and Northeast through early next week.”
Debby made landfall in western Florida as a Category 1 storm early Monday. It packed destructive winds and drenching rains. The storm was forecast to move slowly this week and threaten more flooding in Georgia and the Carolinas – and farther north. It could also deliver cooler air into New England, according to the National Hurricane Center.
Heat endured elsewhere, however. NatGasWeather said “highs of upper 80s to 100s” were projected to drive “regionally strong demand” across “much of the western and southern U.S.” through at least mid-August.
