After minor changes in the latest forecasts, and coming off a sharp rally a day earlier, natural gas futures were trading slightly lower early Tuesday. The expiring September Nymex futures contract was down 2.1 cents to $2.209/MMBtu shortly after 8:40 a.m. ET.
Weather data overnight underwent few changes overall, with slightly hotter trends around Sept. 3-5 but cooler trends before and after, according to NatGasWeather.
Monday’s rally was likely “unrelated to medium and longer term weather patterns, since it would still require notably hotter trends to flip weather sentiment bullish,” the forecaster said. “...For today’s trade, the focus is on whether September and October futures can hold or add to Monday’s gains. Although what could be more important is what happens once October takes over as the front month at Wednesday’s close and if prices sell off after.”
Looking further out, the market remains on a path toward 3.75 Tcf in end-October storage and appears unlikely to deviate much from its current trajectory, according to Energy Aspects.
“Our short-term supply-demand balances show weekly injection rates near 90 Bcf or above starting the week ending Sept. 6 through the week ending Oct. 18,” Energy Aspects said. “The market could even be contending with seven injections in September-October that are 100 Bcf plus or near that psychologically large mark.
“As a result, sentiment could turn even more bearish once again. Our weekly balances also show potential for injection activity to last through at least mid-November, which would tip storage north of 3.8 Tcf” by the time the market flips to withdrawals, according to the firm.
Meanwhile, the National Hurricane Center (NHC) was monitoring Tropical Storm Dorian as it moved over the Caribbean early Tuesday. As of 8 a.m. ET, Dorian was located about 15 miles west-northwest of St. Lucia’s, and NHC’s probable path for the storm had it on course to potentially reach Florida by this weekend.
“Dorian is moving toward the west-northwest near 13 mph, and this motion is expected to continue through tonight, followed by a turn toward the northwest on Wednesday,” NHC said. “On the forecast track, the center of Dorian will move across the eastern and northeastern Caribbean Sea during the next few days, passing near or south of Puerto Rico on Wednesday, move near or over eastern Hispaniola Wednesday night, and move north of Hispaniola on Thursday,” NHC said.
Dorian is forecast to approach hurricane strength by the time it nears Puerto Rico and Hispaniola, according to NHC.
NHC’s path for the storm “suggests a greater risk of being a demand-destruction event rather than production-destructive,” observed analysts with Genscape Inc. They noted that “NHC does not forecast the system to arrive in the Florida area until late Saturday, and confidence levels associated with time and intensity are currently low.”
October crude oil futures were trading 55 cents higher at $54.19/bbl at around 8:40 a.m. ET, while September RBOB gasoline was up about 1.8 cents to $1.6347/gal.