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October gas gives back overnight gains ahead of weekend

Afterending the prior session down 6.7 cents at $2.990/MMBtu, October natural gasfutures seesawed overnight ahead of the Friday, Sept. 23, open, as the marketsearches for fresh support to drive sharper gains or losses. While pulling backabove $3/MMBtu to post an overnight high at $3.009/MMBtu, the front-monthcontract was last seen 0.1 cent lower at $2.989/MMBtu.

Weatherthat is supportive of demand is seen to have driven a continuation of theslower-than-normal pace of storage-building in the U.S. Energy InformationAdministration's latest inventory data that outlined a net to stocks for the weekto Sept. 16 that took total working gas stocks to 3,551 Bcf, or 140 Bcf abovethe year-ago level and 268 Bcf above the five-year average of 3,283 Bcf.

Althoughthe reported build bested consensus estimates that called for a 49-Bcf addition, it was wellbelow both the 83-Bcf five-year average addition and the 96-Bcf build seen inthe corresponding week in 2015.

Coolingdegree day data from the National Oceanic and Atmospheric Administration forthe week to Sept. 17 show 33.3% more cooling degree days compared to the sameweek last year and 36.8% more than normal for the week.

Withweather forecasts suggesting ongoing warming across the bulk of the country inthe coming weeks, cooling demand could remain buoyed and continue keeping a lidon the amount of natural gas available to be moved into underground storagefacilities.

UpdatedNational Weather Service outlook maps for the six- to 10-day and eight- to14-day periods show above-average temperatures engulfing the entire East, amajority of the central U.S. and portions of the West, which should prevent thetypical tapering off of cooling demand associated with the fall shoulderseason, and divert natural gas away from storage facilities and toward theelectric-power sector as utilities work to meet cooling load.

Naturalgas demand has exhibited some resilience of late, as the latest"Natural Gas WeeklyUpdate" from the EIA for the week ended Sept. 21, which willbe partly covered in the next weekly inventory data, suggests that total U.S.gas consumption was unchanged week on week at an average of 59.4 Bcf/d, whilesupply declined by 1% over the same period as it fell from 78.3 Bcf/d to 77.7Bcf/d.

Counteractingthe upside momentum, however, total gas inventories remain on a path to reach arecord-high end-of-season level estimated at 4,042 Bcf, despite the streak oflackluster storage injections that has dominated the refill season to date.

Incash trade, price activity for natural gas moved Thursday for Friday flowpredominantly deflated, as outlooks for mixed but mostly softer demand at theclose of the workweek conspired with weakness at the futures arena.

Acrossthe major hubs, the charge lower was led by Transco Zone 6 NY day-ahead gaspricing that crumbled by 35 cents in deals averaging at $1.150/MMBtu. Chicagospot gas price action followed with a better-than-3-cent slump to an index at$3.058/MMBtu, followed by benchmark Henry Hub and PG&E Gate cash gas pricesthat faltered around 1 cent on average to indexes at $3.176/MMBtu and $3.549/MMBtu,respectively.

Regionally,Northeast spot gas price activity shed almost 22 cents on the session toaverage at $2.121/MMBtu, as Midwest next-day gas pricing unraveled a littlemore than 8 cents on the day in trades averaging at $2.970/MMBtu. Gulf Coastcash gas price action eased by about 2 cents to an index at $3.016/MMBtu, asWest Coast day-ahead gas prices fell 3 cents on average to an index at$2.851/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 andnatural gasindex prices, as well as forwards and futures, visitour Commodities Page.