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November gas advances ahead of 1st day as lead, storage data

Takingthe lead from the October gas contract that rolled off the board in the prior sessiondown 4.4 cents at a finish at $2.952/MMBtu, natural gas futures for November werebiased higher overnight ahead of the Thursday, Sept. 29, open as traders jockeyedfor positions leading up to the midmorning release of the weekly storage reportthat is expected to show another smaller-than-average build that would allow fora further erosion of stock overhangs. The fresh front-month contract,which settled the prior session 4.8 cents lower at $3.002/MMBtu, was last seen 0.1cent higher at $3.003/MMBtu.

Marketparticipants anticipate the forthcoming storage data due out from the U.S. EnergyInformation Administration at 10:30 a.m. ET to show natural gas stocks buildingat a still lackluster pace.

Pre-dataestimates call for aninventory injection from 50 Bcf to 59 Bcf, with consensus formed at a 54-Bcf buildfor the storage report week to Sept. 23. This would compare against a 99-Bcf year-agoaddition to stocks and a 97-Bcf five-year-average build.

Coolingdegree day data from the National Oceanic and Atmospheric Administration for theweek to Sept. 24 reflect weather supportive of demand, outlining 51.2% more coolingdegree days than in the same week last year and 106.7% more than normal for theweek.

Totalworking natural gas in storage currently sits at 3,551 Bcf, or 140 Bcf above theyear-ago level and 268 Bcf above the five-year average of 3,283 Bcf, after the EIAoutlined a 52-Bcf additionto stocks for the week to Sept. 16.

A storagefigure at this week's consensus would improve overall stocks to 3,605 Bcf, but trimthe year-on-year overhang to 95 Bcf and shrink the year-on-five-year-average surplusto 225 Bcf.

Weatherforecasts reflecting sustained heat across major cooling regions fuel upside momentumfor futures, but only to a limited degree as the calendar arrival of the fall seasonsuggests milder conditions that should keep a lid on demand.

In itslatest temperature outlooks for the six- to 10-day and eight- to 14-day periods,the National Weather Service continues to see above-average temperatures prevailingover the entire East and the bulk of the central U.S., as average to below-averagetemperatures span the West and a few portions of the west-central U.S.

Lingeringabove-average temperatures in forecasts spell ongoing support for cooling demand,yet lower high temperatures associated with the fall shoulder season looks to limitthe need for cooling.

Furtherout, longer-range forecaststhat project mild conditions across the bulk of the country through the winter heatingseason, except in the Northeast where significant cold is expected, look to keepoverall demand for natural gas for both late cooling and early winter heating atbay.

At thecash markets, natural gas values for day-ahead flow predominantly retreated Wednesday,as weather-related demand weakness across major portions of the country combinedwith losses at the futures complex.

Lookingat the key hubs, a near 13-cent decline steered Transco Zone 6 NY next-day gas priceaction to an index at 87.4 cents/MMBtu, as an almost 9-cent reduction took Chicagospot gas pricing to an index at $2.867/MMBtu. Meanwhile, better-than-4-cent losseson average drove PG&E Gate and benchmark Henry Hub cash gas prices to indexesat $3.415/MMBtu and $3.026/MMBtu, respectively.

Regionalaverages were mixed but mostly lower. Day-ahead gas pricing in the Northeast roseby about 15 cents against the wider downtrend to an index at $1.798/MMBtu, as cashgas price activity in the Midwest deflated by around 11 cents in transactions averagingat $2.766/MMBtu. Spot gas prices on the West Coast fell by nearly 8 cents on averageto an index at $2.699/MMBtu, as next-day gas price action in the Gulf producingregion shed roughly 6 cents in trading to average $2.836/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 gas indexprices, as well as forwards and futures, visitour Commodities Pages.