NEW YORK: US natural gas futures held steady on Wednesday on forecasts for steady demand over the next two weeks despite a bearish belief in the market that daily output will soon rise after the Mountaineer XPress pipe in West Virginia returned to service last weekend.
Front-month gas futures for November delivery on the New York Mercantile Exchange fell 0.9 cents, or 0.3percent, to USD3.002 per million British thermal units (mmBtu).
For the month, prices were up about 2percent in September after rising 7percent in August.
Financial firm LSEG said average gas output in the US Lower 48 states eased to 112.2 billion cubic feet per day (bcfd) so far in September, down from a monthly record high of 112.3 bcfd in August.
Over the past week, however, output has averaged a much lower 109.4 bcfd, due in part to the force majeure that Canadian energy firm TC Energy’s Columbia Gas Transmission unit declared on the Mountaineer XPress pipe on September 24.
Columbia Gas Transmission lifted the force majeure on September 27 after fixing a mechanical issue that affected around 1.4 bcfd to 1.8 bcfd of gas flows.
Record output and mild spring weather have allowed energy firms to keep the amount of gas in inventory above the five-year (2021-2025) average since March, reaching a high of 7.7percent above normal in April.
But hotter-than-normal weather over the summer forced energy firms to pull lots of gas from storage to fuel power plants needed to keep air conditioners humming, cutting the inventory surplus. About 40percent of US power generation comes from gas-fired plants.
With the weather still hotter than normal last week, analysts predicted the amount of gas in storage slid to 2.4percent above normal during the week ended September 25, down from 2.9percent above normal in the previous week, according to estimates ahead of Thursday’s weekly federal inventory report.
Looking forward, however, meteorologists predicted average weather across the country will remain mostly near normal through October 15, which should keep both heating and cooling demand low.
LSEG said average gas demand in the Lower 48 states, including exports, will rise from 102.3 bcfd this week to 105.3 bcfd next week as the weather turns seasonally cooler. Those forecasts were similar to LSEG’s outlook on Tuesday.
Average gas flows to the nine big US LNG export plants rose to 17.9 bcfd so far in September, up from 17.2 bcfd in August, but have remained short of the monthly record high of 18.8 bcfd in April.
The increase in average LNG feedgas in September occurred despite the shutdown of US energy firm Berkshire Hathaway Energy’s 0.8-bcfd Cove Point LNG export plant in Maryland around September 19 for a few weeks of annual maintenance.
Around the world, gas traded near USD24 per mmBtu at the Dutch Title Transfer Facility benchmark in Europe and USD25 at the Japan-Korea Marker benchmark in Asia.
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