A bump in estimated liquefied natural gas (LNG) export demand, alongside predictions of a below-average injection from the latest government storage report, helped lift gas futures in early trading Thursday. The October Nymex contract was up 3.7 cents to $2.523/MMBtu at around 8:45 a.m. ET.
Interstate pipeline flow data from Genscape Inc. early Thursday showed a 385 MMcf/d increase day/day in feed gas flows to U.S. LNG export terminals, with volumes climbing to 3.43 Bcf/d as of the evening cycle. The firm attributed the increased demand to a 268 MMcf/d uptick in flows to the Freeport LNG terminal and a 121 MMcf/d increase in volumes headed toward Cheniere Energy Inc.’s Corpus Christi facility.
“Currently, evening cycle nominations suggest Cameron LNG and Cheniere’s Sabine Pass LNG facility will remain inoperational for today’s gas day,” the firm said in a note to clients.
Meanwhile, analysts have been predicting relatively modest additions to underground gas stockpiles for the week ended Aug. 28, according to surveys conducted ahead of Thursday’s U.S. Energy Information Administration (EIA) storage report. A Bloomberg survey found injection estimates ranging from 29 Bcf to 43 Bcf, with a median of 37 Bcf, while a Reuters poll found estimates ranging from 25 Bcf to 43 Bcf and a median of 35 Bcf.
NGI estimated an injection of 32 Bcf for the report, which is scheduled for 10:30 a.m. ET.
Last year, EIA recorded a 77 Bcf injection for the similar week, and the five-year average is a build of 66 Bcf.
“It was very warm to hot over most of the U.S., with very little coverage” of below-normal temperatures during this week’s EIA report period, forecaster NatGasWeather said. “We expect a build of 32-33 Bcf, although it’s challenging trying to account for the plethora of impacts” of two named storms, Marco and Laura, making landfall in the United States last week.
The latest forecast guidance showed “no major changes overall,” still pointing to increased national demand over the next few days as heat is expected to build into the eastern United States, NatGasWeather said.
“It’s also hot over the West, with 90s and 100s, while very warm to hot from Texas to the Southeast with upper 80s to lower 90s,” the forecaster said. “However, much cooler than normal weather systems are still expected to track into the northern and central U.S. next week with highs of only upper 50s to 70s for early season” heating degree days.
Conditions for the Sept. 11-18 continued to look “quite bearish” in the overnight data, with comfortable temperatures expected. However, the models might be “too bearish” for this stretch, with NatGasWeather noting that they “could easily add” cooling degree days moving forward.
October crude oil futures were off 76 cents to $40.75/bbl at around 8:45 a.m. ET, while October RBOB gasoline was down about 1.4 cents to $1.1877/gal.
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