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September Natural Gas Prices Lose Steam Ahead of Modest EIA Storage Build
After a steep 13-cent rally during the prior trading session, natural gas futures pedaled back a bit early Thursday as major weather models showed slightly less heat in mid-August. The September Nymex gas futures contract was trading two-tenths of a cent lower at $4.156 at 8:45 a.m. ET.
Despite the loss of 2-3 cooling degree days from the long-range outlook, next week still is expected to bring the hottest weather of the summer. However, the sweltering outlook for the eastern half of the country is now expected to ease a bit by Aug. 16.
Above-normal temperatures instead are likely to remain in the West, including the Northwest, where much above-normal temperatures are forecast early in the period, according to Maxar’s Weather Desk. The forecaster said the models are hotter in the Interior West and Plains, but risks are mixed. There may be a cooler signal associated with the Pacific Ocean.
Weather aside, natural gas traders are on pins and needles awaiting the latest round of government storage data, which is scheduled to be released at 10:30 a.m. ET. Ahead of the report, analysts and market observers did not appear to have a firm grasp on the size of the injection that may be reported by the Energy Information Administration’s (EIA).
A Wall Street Journal poll produced estimates ranging from an increase of 14 Bcf to as much as 34 Bcf. Reuters polled 17 analysts, whose estimates were in the same range with a median injection of 21 Bcf. A survey by Bloomberg had a median injection of 18 Bcf, and NGI modeled a 17 Bcf build.
This would compare with last year’s 32 Bcf injection and the 30 Bcf five-year average build, according to EIA.
NatGasWeather said it was hotter than normal over most of the United States during the reference period ending July 30, especially across the Midwest. Cooler-than-normal conditions were over the Southwest and into the East. The forecaster pegged the storage build at 13 Bcf, “to the slightly bullish side.”
Despite the early weakness along the Nymex, Mobius Risk Group said there were no strong resistance levels in the near term. The last time front prices traded this high was during November 2018 when the December futures contract was prompt. “Prices ultimately traded as high as $4.929 that month.”
Crude oil futures were trading higher early Thursday, up about 40.0 cents to $68.56/bbl. RBOB gasoline futures were up about a penny to $2.263/gal.
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