Sign Up for FREE Daily Energy News
Canadian Flag CDN NEWS  |  US Flag US NEWS  | TIMELY. FOCUSED. RELEVANT. FREE
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • youtube2
BREAKING NEWS:

Hazloc Heaters
Copper Tip Energy Services
Hazloc Heaters
Copper Tip Energy


US Natgas Set for 6th Straight Weekly Gain on Worries over Tighter Supplies


These translations are done via Google Translate

natural gas stove 1200x810

(Reuters) – U.S. natural gas futures eased on Friday, but looked still set for their sixth straight weekly gain on worries over tighter supplies due to a decline in output and as the latest federal report showed utilities added smaller-than-normal amount of gas into storage last week.

Front-month gas futures for November delivery on the New York Mercantile Exchange were down 6.5 cents, or 2.2%, to $2.91 per million British thermal units (mmBtu) at 9:48 a.m. EDT (1348 GMT). The contract has gained 0.2% so far for the week after prices hit their highest level since mid-June at $3.019 this week.

U.S. Energy Information Administration (EIA) on Thursday said utilities added 55 billion cubic feet (bcf) of gas into storage in the week ended Sept. 27 which was below the build of 57 bcf that analysts had forecast in a Reuters poll. That compares with an with an injection of 87 bcf during the same week a year ago and a five-year (2019-2023) average increase of 98 bcf for this time of year.

“Supplies going into the winter season are coming in lower than previous expectations, that’s raising some hopes in the industry that has been hurt by low prices that there could be some light on the horizon ” said Phil Flynn, an analyst at Price Futures Group.

The front-month contract has gained about 60% since late August, mainly due to a drop in the amount of fuel going into storage for the 2024-2025 winter heating season.

Storage injections in July, August and likely in September were at record lows, according to federal energy data going back to 1997.

That’s because many producers reduced their drilling activities this year after average spot monthly prices at the U.S. Henry Hub benchmark in Louisiana fell to a 32-year low in March. They have remained relatively low since that time.

ROO.AI Oil and Gas Field Service Software
GLJ

“With the market apparently focused on end of season storage that could offer a surplus of only around 4% against the averages, current fundamental developments of a bearish nature are apt to be overshadowed by supportive items such as production that is still being downsized at about 100 bcf/d while LNG export prospects are expected to lift by next week,” energy advisory firm Ritterbusch and Associates said in a note.

Financial firm LSEG said gas output in the Lower 48 U.S. states has fallen to an average of 101.0 billion cubic feet per day (bcfd) so far in October, down from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023.

Financial firm LSEG estimated 142 total degree days (TDDs) over the next two weeks, higher than the 141 estimated on Thursday. Average gas demand in the Lower 48, including exports, was seen at 95.6 billion cubic feet (bcfd) this week and 95.4 bcfd next week, LSEG forecast.

“Natural gas is also getting a boost from the delay of the Longshoreman strike. There was a lot of concern that natural gas demand could have plummeted had the strike continued for a period of time on fears that factories would shut down production of petrochemicals and plastics, so the market is getting a bullish relief,” Flynn added.

U.S. East Coast and Gulf Coast ports began reopening late on Thursday after dockworkers and port operators reached a wage deal to settle the industry’s biggest work stoppage in nearly half a century, but clearing the cargo backlog will take time.

Meanwhile, Dutch and British wholesale gas prices were largely flat on Friday morning, after rising on Thursday afternoon, as lower demand and stable supply were expected.

Reporting by Anushree Mukherjee and Swati Verma in Bengaluru

Share This:




More News Articles


GET ENERGYNOW’S DAILY EMAIL FOR FREE