NEW YORK: US natural gas futures were little changed on Friday as a drop in daily output and forecasts for continued hot weather offset a predicted reduction in gas use next week due in part to the three-day US Labor Day holiday weekend.
Front-month gas futures for October delivery on the New York Mercantile Exchange fell 0.3 cents, or 0.1%, to settle at $2.765 per million British thermal units (mmBtu).
For the week, the front-month was up about 9% after falling less than 1% last week.
In Georgia and Florida, there were still over 104,000 homes and businesses without power on Friday in the wake of Hurricane Idalia, according to data from PowerOutage.us. Those figures were down from outage peaks of around 288,000 in Florida and 217,000 in Georgia as utilities restored service.
Energy traders said the electric outages were limiting the amount of gas that power generators in those states were burning to produce electricity.
The remains of Idalia were expected to die out in the Atlantic Ocean by the middle of next week. No tropical cyclones were expected to make landfall in the US over the next week, according to the latest forecast from the US National Hurricane Center (NHC).
Financial firm LSEG said average gas output in the lower 48 US states rose to 102.2 billion cubic feet per day (bcfd) in August, up from 102.1 bcfd in July. That compares with a monthly record of 102.3 bcfd in May.
On a daily basis, however, output over the past couple of days was on track to drop by 2.7 bcfd to a preliminary four-month low of 99.2 bcfd on Friday. Energy traders noted that preliminary data - especially start of the month data - is often revised later in the day.
Meteorologists forecast the weather in the lower 48 US states will remain mostly hotter than normal through at least Sept. 16.
LSEG forecast US gas demand, including exports, will slide from 104.4 bcfd this week to 101.7 bcfd next week due in part to the long holiday weekend before rising to 103.2 bcfd in two weeks, due in part to a forecast increase in LNG exports. The forecasts for this week and next were similar to LSEG’s outlook on Thursday.
Gas flows to the seven big US LNG export plants fell from an average of 12.7 bcfd in July to 12.3 bcfd in August due mostly to reductions at Cheniere Energy’s Sabine Pass in Louisiana and Corpus Christi in Texas. That compares with a monthly record of 14.0 bcfd in April.
On Thursday, US natural gas futures climbed about 2% to a three-week high on Thursday on forecasts calling for the weather to remain hotter than normal through mid September and a reduction in daily gas output.
Capping gains were a bigger than expected storage build and forecasts for less demand in coming weeks as cooler weather cuts air-conditioning demand.
The US Energy Information Administration (EIA) said utilities added 32 billion cubic feet (bcf) of gas into storage during the week ended Aug. 25.
That was more than the 25-bcf build analysts forecast in a Reuters poll and compares with an increase of 61 bcf in the same week last year and a five-year (2018-2022) average increase of 51 bcf.
Analysts noted the amount of gas added to storage was more than expected even though power generators burned lots of gas last week to keep air conditioners humming as extreme heat blanketed the central US Utilities pulled gas from the South Central Region, which includes Texas, for a sixth straight week, the longest such streak since 2017.
Front-month gas futures for October delivery on the New York Mercantile Exchange rose 6.4 cents, or 2.3%, to $2.860 per million British thermal units (mmBtu) at 11:02 a.m. EDT (1502 GMT). The contract was on track for its highest close since Aug. 9.
The front-month price advanced into technically overbought territory with a relative strength index (RSI) above 70 for the first time since early August.
Energy traders noted that one factor limiting gas price gains was a reduction in the amount of gas power generators were burning in the US Southeast due to power outages from Hurricane Idalia.
More than 313,000 homes and businesses were still without power in Florida, Georgia and the Carolinas, a day after the storm slammed into Florida, according to data from PowerOutage.us. Those totals were down from peaks of around 288,000 outages in Florida and over 217,000 out in Georgia.
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