After dropping sharply in the previous session, natural gas futures clawed back some of their recent losses in early trading Wednesday as analysts were on the lookout for additional gains in export demand. The October Nymex contract was up 4.9 cents to $2.449/MMBtu at around 8:40 a.m. ET.

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The October contract is coming off a steep 18.8-cent decline in Tuesday’s trading. The front month faced a proverbial “perfect storm” of bearish factors that contributed to the decline, according to analysts at EBW Analytics Group.

These included “an even more brutal sell-off in the oil market, technical factors that called for a test of support at the $2.36 marker,” and the possibility of an extended delay to the resumption of normal operations at the Cameron liquefied natural gas export terminal, the EBW analysts said.

“After yesterday’s losses, support for October could be tested as low as $2.28-2.34. Feed gas flows at Sabine Pass are likely to jump sharply again today, though, and could reach 4 Bcf/d soon. This could push prices at Henry Hub significantly above yesterday’s $2.33 level, enabling October to recoup Tuesday’s losses by next week.”

Meanwhile, in the overnight guidance, both the American and European weather models advertised a “minor” loss of cooling demand, according to NatGasWeather. 

Models are “still forecasting a bearish U.S. pattern late this week through Sept. 23 as coverage of 90s becomes limited to the southern U.S.,” the forecaster said. “…The coming pattern will remain bearish without hotter trends or much colder trends.”

Looking ahead to Thursday’s Energy Information Administration (EIA) storage report, Energy Aspects issued a preliminary estimate for a 66 Bcf injection for the week ending Sept. 4. The firm’s projection reflects an estimated 4.6 Bcf/d week/week drop in power burns, with industrial demand also down an estimated 0.4 Bcf/d from pre-Hurricane Laura levels during the report week.

The lost demand from Laura has exacerbated the storage situation in the EIA South Central region, which is approaching peak capacity as the end of the injection season draws near, according to Energy Aspects.

“Even before Hurricane Laura hit, the South Central had been set to contend with diminishing flexibility in its storage as tank tops approach,” the firm said in a recent note to clients. “Non-salt inventories stand at close to 90% of demonstrated capacity, while salt is at around 82%. Given the relative limitations to flexibility in non-salt caverns along with higher utilization, the approaching tank tops would be comparatively worse for non-salt inventories and coming to a head in September.

“Unless the South Central weekly injection rate drops to below its five-year seasonal average for the remainder of the injection season, inventories will hit against capacity in early October. As such, looming regional storage congestion concern is on the table for September.”

NGI’s storage model expects EIA to report a 71 Bcf injection into U.S. gas stocks for the week ending Sept. 4. Last year, EIA recorded an 80 Bcf build for the similar week, and the five-year average is an injection of 68 Bcf.

October crude oil futures were up 75 cents to $37.51/bbl at around 8:40 a.m. ET, while October RBOB gasoline was trading about 2.0 cents higher at $1.1232/gal.