Houston — The NYMEX October natural gas futures contract closed at $2.445/MMBtu Wednesday, up 8.7 cents, as US dry gas production slid to its lowest levels since July 26.
¿No está registrado?
Reciba alertas diarias y avisos para suscriptores por correo electrónico; personalice su experiencia.
RegistroOctober has traded Wednesday between $2.339/MMBtu and $2.457/MMBtu.
"People are positioning themselves for a run," said John Woods, president of JJ Woods Associates. "$2.50[/MMBtu] is my point of stop for this short-term move."
Dry gas production is set to drop to 88.9 Bcf Wednesday, according to S&P Global Platts Analytics. Wednesday's expected production would be the lowest seen since June 26, when output totaled 88.7 Bcf. But production still remains above year-ago levels, when it averaged 84.2 Bcf/d.
But the decline may only be temporary. Platts Analytics expects dry gas production to average 90 Bcf/d over the next week, and then tick up to 90.3 Bcf/d the following week.
Much of this drop in production can be attributed to the Marcellus Shale. According to Platts Analytics, the Marcellus Shale was expected to see an about 600 MMcf day-on-day decline in production on Wednesday, the largest drop of any region.
Meantime, Hurricane Dorian did not make landfall in Florida as previously forecast by the US National Hurricane Center. Power burn forecasts for the Southeast region have been revised in response, as inclement weather is no longer expected to weigh as heavily on demand as before.
Looking ahead, the most recent eight- to 14-day outlook from the National Weather Service calls for warmer-than-average weather for the South, Midwest, and much of the Northeast.
US demand is expected to total 74.2 Bcf Wednesday, its highest level in the past two weeks, according to Platts Analytics. But consumption is expected to fall, averaging 72.2 Bcf/d in the eight- to 14-day period.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
-- Humza Jamal, Humza.Jamal@spglobal.com
-- Edited by Valarie Jackson, newsdesk@spglobal.com