Octobernatural gas futures attempted gains but finished Tuesday, Sept. 27, nearunchanged on the negative side of the ledger as options expired and ahead ofthe contract's roll off the board at the close of business Wednesday. Thecontract settled its penultimate session 0.1 cent lower at $2.996/MMBtu.
Theshrinking of the natural gas inventory glut, as natural gas storage builds haveunderperformed weekly, has kept the market from sinking further but failed toinspire additional gains, leaving October futures holding just below thepsychologically important $3/MMBtu mark.
Thenatural gas storage level of3,551 Bcf, after a larger-than-anticipated but smaller-than-average52-Bcf injection for the week to Sept. 16, is expected to be followed by asimilar injection for the review week to Sept. 23, according to analysts' andtraders' early estimates.
Thisweek's build will compare against the year-ago injection of 99 Bcf and thefive-year-average build of 97 Bcf. If reported near estimates, the build wouldfurther erode the natural gas storage overhangs with current inventories 140Bcf above the year-ago level and 268 Bcf above the five-year average.
Whileshrinking surpluses offer some upside support for values, weather forecasts arekeeping some downside pressure on the market.
Headingdeeper into the lower-demand fall season, weather forecasts kept a lid on gainsas traders begin to move November futures more heavily, with that contractsettled 0.5 cent lower at $3.050/MMBtu. The contract will move into the leadposition late Wednesday.
NationalOceanic and Atmospheric Administration weather forecasts for the six- to 10-dayand eight- to 14-day periods show above-average temperatures keeping hold overthe entire eastern half of the country, while below-average temperatures gripthe West and a span of average temperatures in the west-central U.S. separatesthe two extremes.
Longerrange, the Weather Company released its seasonal outlook that calls for warmer-than-normalweather to continue through fall in the eastern U.S., while the first officialwinter outlook for December-February 2017 calls for above-average temperaturesin all locations except parts of the Northeast, where an early colder winter islikely.
Weatheras forecast should keep demand for cooling and heating limited in the midrange,while sinking temperatures in the Northeast as early as November could drivesome early heating demand that begins to drive some support for stronger gainsheading closer to the peak winter heating season.
Spotgas markets were mostly lower as traders booked product for Wednesday flow amidthe expectation for lower demand.
AtTransco Zone 6 NY, trades were lower by more than 10 cents to an index below$1.00, while Tetco-M3 trades were about 5 cents higher to an index around 85cents. Henry Hub trades were about 1 cent lower to an average near $3.00, Wahatrades were nearly 5 cents lower to an index below $2.90 and Chicago tradeddown nearly 5 cents to an index around $2.95. At the SoCal Border and PG&EGate, trades were about 10 cents lower to indexes around $2.95 and $3.45,respectively.
Market prices and includedindustry data are current as of the time of publication and are subject tochange. For more detailed market data, including our power,naturalgas and coalindex prices, as well as forwardsand futures,visit our Commodities Pages. To view detailed EIA Weekly Natural Gas Storagedata, go to our Natural GasStorage Page.