NEW YORK: US natural gas futures held steady on Thursday as traders awaited a federal storage report, with expectations of easing demand from a broad US cooldown and record output offsetting support from stronger liquefied natural gas exports.
Front-month gas futures for October delivery on the New York Mercantile Exchange traded unchanged at $2.88 per million British thermal units at 09:37 a.m. EDT (1337 GMT).
“We have seen little shift in a weather factor that continues to tilt decidedly in a bearish direction, with a broad-based cooldown still intact across most of the US,” said Jim Ritterbusch of Ritterbusch and Associates in Florida.
Financial firm LSEG estimated 128 cooling degree days over the next two weeks, lower than the 155 CDDs estimated on Wednesday. The norm for this time of year is 130 CDDs.
CDDs, which are used to estimate demand to cool homes and businesses, measure the number of degrees a day’s average temperature is above 65 degrees Fahrenheit (18 degrees Celsius).
LSEG projected average gas demand in the Lower 48 states, including exports, would ease from 111.1 bcfd this week to 107.3 bcfd next week and 104.2 bcfd in two weeks. The forecasts for this week and next were similar to LSEG’s outlook on Wednesday.
“Although export activity has improved of late, much of this gain has been offset by a continued strong pace of production that has been undeterred by any storm-related disruptions to the Gulf of Mexico,” Ritterbusch said.
In the tropics, the US National Hurricane Center reported no disturbances in the Atlantic, while Tropical Storm Fernand, which formed south-southeast of Bermuda on Saturday, transitioned into a post-tropical system on Thursday. LSEG said average gas output in the Lower 48 states had risen to 108.5 billion cubic feet per day so far in August, up from a record monthly high of 107.8 bcfd in July.
The average amount of gas flowing to the eight big US LNG export plants has risen to 15.9 bcfd so far in August, up from 15.6 bcfd in July. That compares with a record monthly high of 16.0 bcfd in April.
The US Energy Information Administration is scheduled to release its weekly storage report at 10:30 a.m. EDT (1430 GMT).
According to the average estimate of analysts in a Reuters poll, US energy firms likely added a below-normal 26 billion cubic feet of natural gas into storage last week. That compares with an increase of 35 bcf during the same week a year ago and a five-year (2020-2024) average build of 38 bcf for this time of year. In the prior week ended August 15, utilities added 13 bcf of gas into storage.
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