Natural gas futures were trading slightly lower early Friday as energy operators were in the process of assessing damages and resuming normal activities in the aftermath of Hurricane Laura. After surging 13.6 cents in the previous day’s trading, the October Nymex contract was down 1.7 cents to $2.693/MMBtu at around 8:45 a.m. ET.
Laura had weakened into a depression as of early Friday. The storm was about 95 miles west-northwest of Memphis, TN, and moving northeast.
Genscape Inc. estimated early Friday that 755,000 people were without power across Louisiana, Texas and Arkansas in the wake of Laura’s destructive path through the Gulf Coast as a major hurricane this week.
“Gulf of Mexico production is still mostly offline — down at least 1.5 Bcf/d from pre-storm levels — with pipeline notices indicating that remanning efforts will be underway beginning today,” the firm said. “Pipes posted several notices indicating that storm related restrictions would be lapsing soon as crews inspected infrastructure in the area.”
Liquefied natural gas (LNG) feed gas demand remained “still very low” at around 2.8 Bcf/d early Friday, according to estimates from Bespoke Weather Services.
“Assuming no material damage is found,” both production and LNG demand “should start moving back higher over the weekend into next week,” Bespoke said. “…The market seems to accept the idea that LNG will ramp up significantly and we will have no issues. That could work out but still seems premature to us. Again, the bullish winter case is evident, but we are more cautious at the front of the curve.”
Meanwhile, on Thursday the U.S. Energy Information Administration (EIA) reported a 45 Bcf injection into U.S. natural gas stocks for the week ending Aug. 21, in line with consensus but below the year-ago and five-year average builds.
While the figure came in below seasonal norms, “all the heavy lifting was done in the Pacific region, where the minus 7 Bcf week/week change compared to norms of plus 2 Bcf,” analysts at Tudor, Pickering, Holt & Co. (TPH) said.
Some of the “more problematic regions,” those with less slack in available storage capacity heading toward the end of the injection season, saw inventories grow relative to the five-year average during the week, with the South Central picking up 3 Bcf and the East adding 5 Bcf, TPH said.
“However, we’re likely to see some relief next week as we’re currently forecasting a total build of around 35 Bcf, which would be roughly half seasonal norms, as constructive weather continues to support strong power burn,” the TPH analysts said. “On the whole, weather has been incredibly supportive this injection season, with cumulative degree days the highest in five years and 10% above the five-year average. However, cumulative injections are still 20% above the five-year average.”
October crude oil futures were off 4 cents to $43.00/bbl at around 8:45 a.m. ET, while September RBOB gasoline was trading fractionally higher at $1.2882/gal.
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