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November gas stalls ahead of storage report release

After climbing by 4.5 cents in the prior session to settle at $2.940/MMBtu, NYMEX November natural gas futures were in shallow positive territory overnight ahead of the Thursday, Oct. 5, open and the midmorning release of the weekly storage data that is poised to show another modest build to stocks. At 7:05 a.m. ET (1105 GMT) the contract was down 1.1 cents at $2.929/MMBtu while trading as high as $2.949/MMBtu.

Weather-driven demand support is expected to have limited the amount of natural gas moved into underground storage facilities when the U.S. Energy Information Administration releases its next weekly inventory data at 10:30 a.m. ET on Thursday that will cover the week ended Sept. 29.

Traders and analysts anticipate an injection from 41 Bcf to 61 Bcf for the forthcoming storage report, with consensus formed at a 51-Bcf addition to stocks. This would compare to a 91-Bcf five-year-average build and a 76-Bcf injection seen in the corresponding week in 2016.

Degree day data from the National Oceanic and Atmospheric Administration for the week to Sept. 30 outline cooling degree days that were 91.7% more than normal.

The week's data would follow a 58-Bcf build reported for the week to Sept. 22 that took total working gas stocks to 3,466 Bcf, or 127 Bcf below the year-ago level and 41 Bcf above the five-year average of 3,425 Bcf.

A storage build at consensus would bring overall inventories to 3,517 Bcf, shrinking the year-on-five-year-average surplus to 1 Bcf and expanding the year-over-year deficit to 152 Bcf.

An unseasonable warming trend in store in the midrange suggests ongoing support for cooling demand in the coming weeks that should continue capping subsequent storage injections moving closer to the end of the titular rebuilding period on Oct. 31.

Updated National Weather Service projections show above-average temperatures encompassing the East Coast and parts of the West in the upcoming six- to 10-day period, before shifting and expanding in scope further out to the eight- to 14-day period to grip nearly the entire northern tier of the country, the Southwest and fringes of the Southeast.

Average to below-average temperatures that settle over the central U.S. and much of the West in the shorter-range view become contained to a section of the Northwest, edges of the Midwest, balance of the mid-Atlantic and much of the Gulf Coast into parts of the Southeast in the longer-range period.

The tropics will remain a factor through November, posing potential risks U.S. natural gas supply or demand. The National Hurricane Center is currently monitoring Tropical Depression 16 last eyed at about 50 miles south of Puerto Cabezas, Nicaragua, packing maximum sustained winds of 35 mph as it moves northwest at 7 mph, as of 5 a.m. ET on Oct. 5. It is expected to become a tropical storm before moving inland over northeastern Nicaragua on Thursday then onto eastern Honduras, before tracking over the northwestern Caribbean Sea into Friday and approaching the coast of the Yucatan peninsula late Friday.

In cash activity, the natural gas offering moved Wednesday for Thursday flow was valued higher in much of the country on the back of supportive weather and demand expectations.

Among the key hubs, the uptrend was led by Transco Zone 6 NY spot gas price action that added about 31 cents on the session to average at $2.769/MMBtu. Chicago next-day gas pricing followed with an almost 16-cent increase in deals averaging at $2.713/MMBtu, then benchmark Henry Hub and PG&E Gate cash gas prices that were lifted by roughly 7 cents on average to indexes at $2.800/MMBtu and $3.149/MMBtu, respectively.

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In regional terms, Northeast day-ahead gas price activity rose by approximately 22 cents to an index at $2.151/MMBtu, while Midwest spot gas pricing logged a near 14-cent uptick as it averaged at $2.614/MMBtu. Gulf Coast and West Coast next-day gas prices climbed by about 10 cents on average to indexes at $2.747/MMBtu and $2.345/MMBtu, respectively.

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Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities Pages.