Natural gas futures were trading slightly higher early Monday amid a stable forecast and strength on both the supply and demand side of the balance equation. The September Nymex futures contract was up 2.5 cents to $2.177/MMBtu at around 8:40 a.m. ET.
The forecast over the weekend trended cooler for this week but warmer for next week to leave weather-driven demand expectations flat overall versus Friday’s outlook, according to Bespoke Weather Services.
“Models were slightly hotter, although they do not show as much tendency for above normal heat in what is today’s 11-15 day as we had expected...the period still stays close to normal demand levels, with the best heat chances again back in the western half of the nation,” Bespoke said. “We do still suspect that the eastern U.S. sees more anomalous heat as we move through September. It’s just not yet showing up with consistency in the models.”
Maxar’s Weather Desk highlighted a mix of changes to its latest six- to 10-day forecast Monday, including warmer trends across the Midcontinent and cooler trends in the East and West.
“High pressure brings a round of belows to the Midwest early in the period before pressing into the East with belows mid-period,” the forecaster said. “The East is above normal on Day 6 ahead of the cool push and is forecast to warm back above normal late, but there is concern that the high could linger overhead.”
Further out in the 11-15 day, Maxar noted minor changes to its latest forecast.
“The general pattern themes remain with aboves in the West, East and Texas, and temperatures residing on the cooler side of normal in the north-central. Warmth is expected to be most widespread early, with cooler learnings in the central U.S. mid-period under a trough over the Great Lakes.”
Meanwhile, in terms of balances, Genscape Inc. estimates showed a rebound in production over the weekend, with Lower 48 output topping 92.1 Bcf/d to recover from maintenance-related declines last week.
“Last Monday, production established a new record high at 92.33 Bcf/d, but the very next day fell nearly 1.7 Bcf/d with numerous maintenance events from the Rockies to the Marcellus lopping off volumes,” Genscape senior natural gas analyst Rick Margolin said. “But volumes gradually recovered through the week through Sunday.
“This has once again lifted the August month-to-date average, now at 91.37 Bcf/d, more than 0.94 Bcf/d above our forecast headed into the month primarily led by Texas and Gulf-area regions outperforming.”
On the demand side, Bespoke observed liquefied natural gas (LNG) feed gas demand reaching a new all-time high over the weekend, measuring slightly above 6.6 Bcf/d.
“Prices have moved higher so far this morning, but we still suspect that we tend to chop around mostly in the $2.15-2.20 range in the near term, as we see little in the data that, in our view, argues that we need to move prices above or below that range” going into August expiry, Bespoke said.
October crude oil futures were trading 75 cents higher at $54.92/bbl at around 8:40 a.m. ET, while September RBOB gasoline was trading about 1.7 cents higher at $1.6597/gal.