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August gas futures reverse early overnight losses

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August gas futures reverse early overnight losses

Afterending the prior session up 3.4 cents at $2.692/MMBtu, August natural gasfutures initially recoiled overnight ahead of the Friday, July 22, open, butturned positive later, as traders consider ongoing weekly storage builds thatremain below averages but that continue to drive inventories closer to what isexpected to be a record-high level ahead of winter, with the contract last seen1.5 cents higher at $2.707/MMBtu.

Inits latest storage data released July 21, the U.S. Energy Information Administrationoutlined a net 34-Bcfaddition to stocks for the week to July 15 that continued thelackluster pace of storage-building as it compared against consensus coming into the daythat had called for a 37-Bcf injection, as well as a 70-Bcf build seen in thecorresponding week in 2015 and the 61-Bcf five-year average injection.

Thereported build to stocks took overall inventories to 3,277 Bcf, or 471 Bcf abovethe year-ago level and 559 Bcf above the five-year average of 2,718 Bcf.

Ongoingdemand support implied by widespread warming in weather forecasts for late Julyto early August suggest a continuation to the streak of underperforming storageinjections in the coming weeks.

Updatedsix- to 10-day and eight-to 14-day outlooks from the National Weather Serviceshow above-average temperatures encompassing the bulk of the country, save forthe west-north-central U.S., where average temperatures look to linger in theshorter-range period before being joined by below-average temperature readingsin the longer-range period.

Althoughaverage to below-average temperatures appear in forecasts, the prevalence ofwarmer conditions suggest firm cooling demand that should limit the amount ofnatural gas available to be moved to underground storage facilities.

Yet,having exited the heating season in March with 2,494 Bcf in inventories, eventhe modest storage builds through the injection season to date is seen to haveset up inventories for a record-high end-of-October level estimated at 4,022Bcf, according to EIA projections.

Incash activity, the price of natural gas booked Thursday for Friday flow wassteady to higher in much of the country amid firm to stronger demandexpectations ahead of the weekend break.

Acrossthe key hubs, a near 55-cent gain on average was seen driving Transco Zone 6 NYnext-day gas prices to an index at $2.729/MMBtu, as an uptick of almost 3 centsbrought PG&E Gate cash gas price action to an index at $3.028/MMBtu and anincrease of about 1 cent took Chicago spot gas pricing to an index at$2.733/MMBtu. Defying the wider advance, a better-than-2-cent decline steeredbenchmark Henry Hub day-ahead gas price activity to an index also at $2.733/MMBtu.

On aregional basis, Northeast spot gas price action added roughly 6 cents on thesession to average at $2.282/MMBtu, as West Coast next-day gas pricing notcheda 2-cent advance in transactions averaging at $2.570/MMBtu. Midwest day-aheadgas price activity was unchanged day on day at an index at $2.625/MMBtu, whileGulf Coast cash gas prices were off about 1 cent on average against the broaduptrend at an index at $2.620/MMBtu.

Market prices and included industry data are currentas of the time of publication and are subject to change. For more detailedmarket data, including power andnatural gasindex prices, as well as forwards and futures, visitour Commodities Pages.