As traders awaited the latest government inventory data to help gauge the supply/demand balance, a small increase in weather-driven demand expectations helped natural gas futures cut into the previous session’s losses in early trading Friday.
After dipping 5.5 cents Thursday, the December Nymex contract was up 4.5 cents to $3.021/MMBtu at around 8:45 a.m. ET Friday.
For this week’s Energy Information Administration (EIA) storage report, releasing a day later than usual on account of the Veterans Day holiday, expectations have clustered around a small withdrawal from U.S. gas stocks for the period ended Nov. 6. However, the range of predictions shows some observers expecting EIA to reveal a modest injection when it reports at 10:30 a.m. ET.
A Bloomberg survey arrived at a median estimate of a 3 Bcf decrease in storage, with estimates ranging from a withdrawal of 12 Bcf to an injection of 5 Bcf. The results of a Wall Street Journal poll ranged from a pull of 12 Bcf to an injection of 10 Bcf and landed at an average decrease of 2 Bcf. A Reuters survey found estimates ranging from a withdrawal of 12 Bcf to an injection of 5 Bcf, with a median decrease of 3 Bcf. NGI’s storage model landed toward the upper end of survey ranges, predicting a 5 Bcf increase.
Last year, EIA recorded a 12 Bcf injection for the similar week, and the five-year average is a build of 33 Bcf.
“It was colder than normal over the South and East, while warmer than normal over the rest of the country” during this week’s EIA report period, NatGasWeather said. “Our algorithm predicts minus 1 Bcf to no change, likely a touch to the bearish side.”
Meanwhile, the overnight guidance added a “minor” amount of heating demand back to the outlook, showing an additional 2-3 heating degree days (HDD) over the next 15 days, the forecaster said.
“No major changes, as the data still shows swings in demand every few days between low and moderate as weather systems and associated cool shots sweep across the northern U.S.,” NatGasWeather said.
Weather data has been “bouncing between milder and colder trends” over the last couple days but has gained 15 HDD since the start of the week. This comes as liquefied natural gas (LNG) feed gas demand levels have been at record highs, helping to bolster prices, according to the forecaster.
“The supply/demand balance remains impressively tight and therefore we look to see which side of $3 the December contract trades after the EIA report,” NatGasWeather said.
Genscape Inc. estimates showed U.S. LNG feed gas demand cresting 10 Bcf/d for Thursday, with that figure climbing to 10.1 Bcf/d for Friday’s gas day. However, upcoming maintenance on NGPL (aka, Natural Gas Pipeline Co. of America) could threaten to cut into recent gains, according to Genscape analyst Preston Fussee-Durham.
“Yesterday, during routine operations, NGPL discovered a leak at the filter separator” at a delivery point with Sabine Pass in Cameron Parish, LA, the analyst said. “As such, effective Thursday, Nov. 19, through Saturday, Nov. 21, deliveries to Sabine Pass liquefaction facilities will be unavailable — jeopardizing up to 830 MMcf/d of feed gas deliveries to Sabine Pass LNG.
“While Sabine Pass does have access to other molecules via Creole Trail, Kinder Morgan Louisiana” and Transco (Transcontinental Gas Pipe Line), “limited operationally available capacity exists to meet the entirety of NGPL’s prior deliveries.”
December crude oil futures were off 78 cents to $40.34/bbl at around 8:45 a.m. ET, while December RBOB gasoline was down about 2.6 cents to $1.1312/gal.
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