Afterending the prior session up 0.8 cent at $3.049/MMBtu, November natural gasfutures recoiled overnight ahead of the Friday, Oct. 7, open in profit-takingand overriding fundamental pressure implied by steadily building inventories andweather-related demand weakness in store in the near term through the midrange.The contract fell as low as $3.015/MMBtu and was last in shallow positiveterritory, up 0.1 cent at $3.050/MMBtu.
Totalworking natural gas in storage improved to 3,680 Bcf, or 74 Bcf above theyear-ago level and 205 Bcf above the five-year average of 3,475 Bcf, after theU.S. Energy Information Administration outlined a net to stocks in its lateststorage data covering the week to Sept. 30.
Thereported injection was below both the 95-Bcf five-year average addition and the96-Bcf build seen in the corresponding week in 2015, but was above consensusestimates coming intothe day that had called for a 70-Bcf build.
Althoughunderperformances of weekly injections against historical averages have drivena steady erosion of storage overhangs that has fueled bullish sentiments in themarket, improvement in total stocks, which keeps inventories on a path toward arobust end-of-season level, keeps the downside viable.
Weatherprospects offer additional pressure for the market, as near-term to midrangeconditions feed anticipation of reduced demand that should free up natural gasfor storage building in the weeks ahead.
Category4 Hurricane Matthew continues to threaten the Eastern Seaboard as it churns inthe tropics. Matthew was last located about 50 miles north-northwest ofFreeport, Bahamas, and about 125 miles southeast of Cape Canaveral, Fla.,packing maximum sustained winds of 130 mph as it moves toward the northwest at13 mph, according to an 11 p.m. ET Thursday update from the National HurricaneCenter. Matthew is forecast to approach the east coast of the Florida peninsulathrough Friday night and to move near or over the coasts of Georgia and SouthCarolina on Saturday.
Heavywind and rainfall associated with the hurricane could result in damage to powerinfrastructure that would cause widespread outages and a drop in gas demand forpower generation.
Furtherout, the National Weather Service outlook maps for the six- to 10-day andeight- to 14-day periods show the entire country blanketed by above-averagetemperatures, which should equate to lower high temperatures given the time ofyear.
Milderweather associated with the fall shoulder season suggests shallow demand foreither cooling or heating, which is likely to encourage an uptick in the rateof weekly injections as natural gas production is allowed to flow more heavilyinto underground storage facilities.
Incash activity, natural gas values for next-day flow predominantly advancedThursday, in line with steadily rising futures.
Acrossthe major delivery locations, the charge higher was led by the benchmark HenryHub spot gas price action that added roughly 16 cents on the session to averageat $3.038/MMBtu. PG&E Gate day-ahead gas pricing followed with a near12-cent increase to an index at $3.412/MMBtu, then Chicago next-day gas priceactivity that notched an almost 10-cent gain in deals averaging at$2.885/MMBtu. Running against the broad uptrend, Transco Zone 6 NY hub pricesfell by 3 cents on average to an index at $1.050/MMBtu.
On aregional basis, Gulf Coast next-day gas pricing climbed by 8 cents to an indexat $2.854/MMBtu, as West Coast spot gas price activity tacked on nearly 13cents on the day to average $2.749/MMBtu. Midwest cash gas prices were liftedby about 11 cents on average to an index at $2.869/MMBtu, while Northeastday-ahead gas price action was almost flat day on day at an index at$1.844/MMBtu.
Marketprices and included industry data are current as of the time of publication andare subject to change. For more detailed market data, including power and natural gas indexprices, as well as forwards and futures, visitour Commodities Pages.