Natural futures forged ahead early Thursday but leveled off, and by early afternoon, were trading in the red following a lean government inventory print. Spot prices were nearly flat at midday.
Here’s the latest:
- September Nymex natural gas contract trading down 5.9 cents to $1.977/MMBtu at about 2:30 p.m. ET
- U.S. Energy Information Administration (EIA) prints 18 Bcf injection for the week ended July 26
The latest result from EIA on Thursday was well below the 31 Bcf median expectation found by a Reuters poll and NGI’s estimate of 29 Bcf. The prior five-year average increase was 33 Bcf.
EBW Analytics Group noted that, early in the covered period, “national electricity loads ripped higher 4% with severe heat.” Power sector gas burns climbed 0.6 Bcf/d from the prior week.
Meanwhile, fundamental data continued to serve up ammunition for both bulls and bears this week.
Wood Mackenzie estimated production at 102 Bcf/d on Thursday. That was in line with the 30-day average and up substantially from spring lows in the 90s Bcf.
On the demand side, the firm said calls for LNG feed gas dipped to 11.7 Bcf/d on Thursday, down nearly 1 Bcf/d from the prior day.
Conditions for robust cooling demand, however, held strong. National Weather Service forecasts called for a hot start to August and for lofty temperatures to persist most of the month. Much of the country could see highs in the 90s and 100s this week into next.
“Stronger demand will help cushion the market from elevated supply levels,” said Rystad Energy analyst Masanori Odaka.
Leading up to Thursday, spot prices advanced three times in as many days this week amid the intensifying heat. Key hubs, though, were trading sideways midday.
- Cash prices at NGI’s Henry Hub averaging $1.950, up 2.0 cents, according to NGI’s MidDay Price Alert
- Chicago Citygate flat at $1.835 after solid gains earlier in the week
AccuWeather’s updated long-range forecast, updated this week, pointed to continued summer-like weather into autumn across a majority of the Lower 48.
“Fall is going to feel more like an extended summer for millions of Americans this year,” said AccuWeather meteorologist Paul Pastelok. “Much of the country will experience a delayed transition to cooler temperatures this year, following a summer with intense heat. We’ve seen record-high temperatures shattered in several cities across California, Nevada, Oregon, Utah and North Carolina this summer. We could see more record temperatures this fall.”
The AccuWeather fall forecast predicted temperatures would hover 1 to 3 degrees above the historical average for most of September through November. The firm said even higher temperature departures are expected across parts of the Great Lakes region, the Midwest and the Rockies.
