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Natural gas falls after EIA projects near-record US storage levels
September Nymex natural gas NGU26 settled down 1.0% as EIA projected storage to reach 3,985 bcf at end of October, the highest in a decade.
Natural gas prices eased after the US Energy Information Administration projected US storage would rise to 3,985 bcf by the end of October, the highest level in 10 years and 5% above the five-year average, according to Yahoo Finance. September Nymex natural gas (NGU26) closed down 0.027, or 0.97%, on Tuesday.
Prices moved higher early as forecasts pointed to hotter conditions in parts of the South that could boost power demand from increased air conditioning use, Yahoo Finance reported. The Commodity Weather Group said above-normal temperatures are forecast across the South for August 16 to 20.
Still, the market reversed after an earlier, larger-than-expected storage build pushed inventories about 6.7% above their 5-year seasonal average, signaling robust supply, the outlet said. Yahoo Finance also cited carryover effects from Energy Transfer announcing the Hugh Brinson pipeline will be able to run at full transportation capacity of 1.5 bcf/day by September 1, which can increase flow to Henry Hub in Louisiana.
On the demand and supply backdrop, the article cited BNEF data showing lower-48 dry gas production at 112.0 bcf/day and lower-48 gas demand at 83.2 bcf/day, while estimated LNG net flows to US export terminals were 17.6 bcf/day. Yahoo Finance added that higher production projections and speculation about El Niño bringing warmer-than-normal conditions to the Northern Hemisphere could weigh on natural gas demand later in the year.
Latest closeNat gas $2.788 ▲0.8%