US natgas prices rise ahead of storage report
Front-month gas futures for August delivery on the New York Mercantile Exchange (NYMEX) traded 4.8 cents, or 1.4% higher, at $3.54 per million British thermal units by 09:49 a.m. EDT (1349 GMT).
The price increase preceded the US Energy Information Administration's weekly storage report, due at 10:30 a.m. ET, that is expected to show energy firms last week injected more gas into storage for a 11th week in a row. Analysts forecast energy firms added 53 billion cubic feet of gas into storage during the week ended June 27.
That compares with an injection of 35 bcf during the same week a year ago and a five-year (2020-2024) average increase of 61 bcf for this time of year.
'Power burns are starting to get some strength here due to seasonal factors. We've got some hot weather across the country,' said Robert DiDona, president of Energy Ventures Analysis.
'We just came out of a period of LNG maintenance. So the stronger export demand...stronger Mexican exports and stronger LNG exports are also contributing to demand.'
The price recovery is likely driven by short-covering ahead of the US storage report and the long holiday weekend, while any bullish storage surprise or slight uptick in cooling demand should potentially trigger sharp price volatility in the natural gas market, Di Dona added.
Financial firm LSEG said average gas output in the Lower 48 US states has risen to 106.7 billion cubic feet per day so far in July, slightly up from 106.4 bcfd in June, when spring pipeline maintenance had temporarily curbed production.
LSEG estimated 237 total degree days over the next two weeks, compared with 206 estimated on Wednesday. It also forecast average gas demand in the Lower 48, including exports, increased to 106.6 billion cubic feet per day for the current week from 103.7 bcfd in the prior week.
The normal level for this time of year is 174 TDDs. Total degree days measure the number of degrees a day's average temperature is above or below 65 degrees Fahrenheit (18 degrees Celsius), to estimate demand to cool or heat homes and businesses.
The average amount of gas flowing to the eight big US LNG export plants rose to 15.4 bcfd in July so far, up from 14.4 bcfd in June, but down from a monthly record high of 16.0 bcfd in April. The feedgas average for July was slightly up from June, as units at some LNG plants returned from maintenance reductions.
Meanwhile, Golden Pass LNG, which is owned by Exxon Mobil and QatarEnergy, has asked US regulators for permission to re-export liquefied natural gas from October 1, as the export plant nears production after previous delays.
The company said it plans to import an LNG cargo to cool down its Texas-based export facility, which is still under construction. Cooling down the plant is typically the final step before it begins producing LNG. Dutch and British wholesale gas prices traded in a narrow range on Thursday due to stable supply from Norway and from liquefied natural gas, while demand from the power sector softened after the end of the heatwave.
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