NEW YORK: US natural gas futures slipped on Tuesday as forecasts projected milder weather and energy firms continued efforts to restart facilities along the US Gulf Coast after Hurricane Ida.
Front-month gas futures for October delivery fell 97 cents, or 2%, to $4.615 per million British thermal units (mmBtu) by 10:17 a.m. EDT (1417 GMT). Energy companies continued efforts to restart facilities with Royal Dutch Shell Plc, the largest US Gulf Coast producer, redeploying personnel to its Auger asset and Enchilada/Salsa assets.
“There are some expectations that more offshore production will be returning this week in the Gulf of Mexico,” said Marshall Steeves, energy markets analyst at IHS Markit, adding that fewer cooling degree days with the summer season coming to a close further weighed on gas prices.
“But storage is still tight and we’re probably going to see more lower-than-average injections as long as Ida remains a force and as offline production is going to be slow to return over the course of this week,” Steeves added.
Data provider Refinitiv said total US production has averaged 89.4 billion cubic feet per day (bcfd) so far in September, down from 92.0 bcfd in August.
Goldman Sachs also said in a note that recent tighter-than-consensus storage injections added to existing winter storage concerns and further increased the winter risk premium priced in the market.
The bank raised its price forecasts for summer and winter 2022 and winter 2023 by $0.15. US pipeline exports to Mexico rose to an average 5.9 bcfd so far this month, from 6.2 bcfd in August, but were slightly lower than June’s monthly record of 6.7 bcfd.
With European and Asian gas both trading over $18 per mmBtu, compared with just under $5 for the US fuel, analysts expect US liquefied natural gas exports to remain elevated.
Comments
Comments are closed.