Spooked by blistering heat, natural gas traders sent August baseload prices higher for several locations on the first day of bidweek trading, NGI’s Bidweek Alert (BWA) showed.
Prices strengthened in California, where a heat dome kept temperatures sweltering and power demand robust. Forecasts call for extreme heat to continue blanketing the region into August. Fixed prices at SoCal Citygate averaged $3.205/MMBtu on day 1 of August bidweek, compared to $3.055 for July. SoCal Border Avg. at $2.895 was up from $2.565 in July.
The National Weather Service’s long-range forecast showed heat continuing in the West and spreading widely throughout the country into early August.
For a large portion of the country, though, fears that the slow pace of storage tightening could lead to a still hefty inventory heading into the fall shoulder season weighed on prices.
Following a surprisingly bullish storage print a week earlier, the U.S. Energy Information Administration (EIA) reported an injection of 22 Bcf of natural gas into storage for the week ended July 19. The result exceeded market expectations and kept pressure on Nymex natural gas futures. The contract settled 7.6 cents lower day/day Thursday at $2.041.
Natural gas inventories stood at 3,231 Bcf after the build, keeping stocks above the year-earlier level of 2,982 Bcf and the five-year average of 2,775 Bcf.
Offering some consolation, EQT Corp., the largest natural gas producer in the United States, said it planned to curtail production through 2024. EQT anticipates 90 Bcfe of curtailments in the second half of the year.
In basis trade on Thursday, prices in the Midwest slipped. Chicago Citygate saw August basis deals between minus 36.0 cents and minus 35.5 cents for an average of minus 36.0 cents, BWA data show. That’s below the minus 44.0-cent average for July.
Southeast basis prices ticked lower as a brief respite from extreme heat provided some downside pressure ahead of hot weather’s return in August. Florida Gas Zone 3 basis prices spanned 52.5 cents to 55.0 cents and averaged 53.0 cents. That compared to 76.0 cents for July. Basis prices at Transco Zone 4 averaged 26.0 cents Thursday, compared to 41.2 cents the month prior.
