U.S. natural gas futures dive nearly 4% on big storage build

reuters.com Import & Export 2019-09-20 08:45:56

U.S. natural gas futures fell almost 4% on September 19 as a bigger-than-expected storage build and forecasts for less cooling demand next week knocked prices further off their highest in nearly five months.

The U.S. Energy Information Administration (EIA) said utilities added 84 billion cubic feet (bcf) of gas to storage during the week ended September 13.

That was higher than the 78-bcf build analysts forecast in a Reuters poll and compared with an injection of 84 bcf during the same week last year and a five-year (2014-18) average build of 82 bcf for the period.

Last week's increase boosted stockpiles to 3.103 trillion cubic feet (tcf), 2.4% below the five-year average of 3.178 tcf for this time of year.

The amount of gas in inventory has remained below the five-year average since September 2017. It fell as much as 33% below that average in March 2019. But with production near a record high, analysts said, stockpiles should reach a near-normal 3.7 tcf by the end of the summer injection season on October 31.

Front-month gas futures for October delivery on the New York Mercantile Exchange fell 9.9 cents, or 3.8%, to settle at $2.538 per million British thermal units (mmBtu), the biggest daily percentage drop since mid July.

Earlier this week, the contract traded near September 16's close of $2.681, its highest since April 10. The front-month exited technically overbought territory for the first time in 13 days, but remained up about 25% over a three-year low of $2.029 per mmBtu hit on Aug. 5. During the past two weeks, prices rose as warmer weather fed air conditioning demand and power generators burned more gas than usual.

Traders noted that warmer than normal weather in late September is a lot cooler than in the summer. If warm weather persists, it will reduce the need for heat, which could hit gas demand. As the weather cools with autumn, data provider Refinitiv projected average gas demand in the lower 48 U.S. states will drop from 85.3 billion cubic feet per day (bcfd) to 81.9 bcfd next week.

In Texas, the remnants of Tropical Storm Imelda caused flooding in the Houston area. Exxon Mobil Corp shut the Beaumont oil refinery, but so far power outages were minimal.

U.S. gas exports are expected to rise over the next two weeks, but not as fast as power generators cut the amount of fuel they burn.

Gas flows to U.S. liquefied natural gas (LNG) export plants held at 6.5 bcfd on September 18, up from an average of 6.1 bcfd last week, according to Refinitiv data.

Refinitiv projected flows to LNG terminals could rise to a record high 6.8 bcfd next week.

Exports to Mexico held around 5.1 bcfd this week even though flows through the 2.6-bcfd Valley Crossing and Sur de Texas-Tuxpan pipes started after TC Energy Corp and Sempra's IENOVA unit resolved pipeline contract disputes with Mexico's Federal Electricity Commision in late August.

Traders said they expect pipeline exports to Mexico to rise over the next few weeks, especially after Kinder Morgan Inc's Gulf Coast Express pipe from the Permian basin to the Texas Gulf Coast enters service in late September/early October.

Gas production in the lower 48 states edged up to 91.5 bcfd on September 18 from 91.3 bcfd on September 17, according to Refinitiv data. That compares with an all-time daily high of 93.0 bcfd on August 19.

(Writing by Jessie Jia  Editing by Harry Huo)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 China's thermal coal expected to go south amid falling demand 2020-05-29

Spot prices of Chinese domestic thermal coal are expected to fall in the near term, as demand from utilities has been weakening. Data from sxcoal.com showed the daily coal burn at China's

2 China coking coal prices stabilize after hitting 34-mth low 2020-05-29

China's coking coal prices have been leveling off these days after touching a 34-month trough on May 20, bolstered by downstream restocking and production cuts during the "Two Sessions" (May 22-28).

3 Chinese seaborne thermal coal market shows signs of softening 2020-05-29

Chinese seaborne import thermal coal market showed signs of weakening late this week, given a dearth of sales as end buyers suspended procurement of foreign cargoes amid domestic market uncertainty.

4 QHD port coal stocks keep falling on active selling by traders 2020-05-29

Coal stockpiles at Qinhuangdao port kept decreasing as traders started actively selling off cargoes in hand after spot thermal coal market softened. The port's inventory fell 5,000 tonnes

5 China excludes clean coal projects from list eligible for green bonds 2020-05-29

China has excluded "clean coal" from a list of projects eligible for green bonds, according to long-awaited new draft guidelines published by the central bank on May 29. The new catalogue

6 China Coal Daily Track (May 29) 2020-05-29

Thermal coal Production area In Inner Mongolia, some coal mines suspended operation as their "coal sale quotas" have run out. Limited supply resulted in a small price rise at these mines.

7 China's new energy installations possibly the highest in history this yr 2020-05-29

In 2020, China's new energy installed capacity will likely reach a new high. On May 25, the National Energy Administration issued an announcement saying that the combined "newly-added dig

8 S Africa Richards Bay Apr coal exports plunge to 9-yr low 2020-05-29

Coal exports from Richards Bay Coal Terminal (RBCT), the largest coal port in South Africa, hit a nine-year low in April, as slump in flows to India and South Korea more than offset increase in volume

9 Two Sessions: Chinese delegates call for more imports of premium coking coal 2020-05-29

Chinese delegates of NPC called for more imports of premium coking coal, in order to boost green development of steel industry. Domestic steel production has been plagued by supply shorta

10 CIL coal supply to power sector dips 22% to 32 Mt in Apr on demand slump 2020-05-29

The supply of coal to the power sector by state-owned Coal India has dropped 22% to 31.95 million tonnes in April amid slump in the fuel demand in the country on account of COVID-19-induced lockdown.

Most Read Articles

1 China Apr thermal coal imports surge 88.95% on yr 2020-05-28

China's thermal coal (incl. bituminous and sub-bituminous coal, but excl. lignite) imports in April surged 88.95% compared with the corresponding month last year, official data said, reaching a record

2 Thermal coal imports for blending in India to be eliminated in FY2020-21 2020-05-26

Indian government has decided to bring to zero import of coal for blending purpose by domestic coal-based power plants in the current fiscal, and has asked state-owned CIL to enter into a pact with po

3 China's spot thermal coal uptick stronger than expected 2020-05-26

Chinese spot thermal coal market witnessed stronger-than-expected upticks during last week, with Fenwei CCI 5500 index rising by a total 52 yuan/t to 543 yuan/t FOB and registering daily increase of o

4 China's coal imports from Mongolia continue to rise, adding pressure to price 2020-05-26

On May 23, Mongolia exported a total 955 trucks of coal to China through two major hubs Gashunnsukhait (Ganqimaodu) and Shivee Khuren (Ceke), Mongolian media GoGo Mongolia reported. The f

5 China's import thermal coal market at a crossroad after nearly 1-mth rebound 2020-05-26

Chinese seaborne import thermal coal market seems at a crossroad as Indonesian coal prices stabilized after rebounding since early May and Australian coal faced dwindling appetite. Wait-a

6 China urges top utilities to speed up transfer of 40 coal-fired power plants 2020-05-27

China has urged the country's five biggest utilities to speed up the transfer of 40 coal-fired power plants in the northwest of the country, according to a document seen by Reuters and confirmed by a

7 Bullish sentiment moderates in Chinese thermal coal market; offer prices slide 2020-05-26

After climbing fast for more than a week, Chinese domestic thermal coal market paused on May 26, as the bullish sentiment was dented by a drop in futures market and people started concerning risks of

8 Chinese domestic thermal coal market keeps cooling down as sentiment weakens 2020-05-28

Sentiment continued to weaken in China's spot thermal coal market amid concerns of recovering supply and falling demand in the coming month, dampening trading activities at northern ports.

9 Two Sessions: Chinese delegates call for more imports of premium coking coal 2020-05-29

Chinese delegates of NPC called for more imports of premium coking coal, in order to boost green development of steel industry. Domestic steel production has been plagued by supply shorta

10 Indonesian thermal coal uptick slows amid uncertain Chinese market 2020-05-27

Trading prices of Indonesian thermal coal were seen at a slower rise in Chinese import market in the middle of this week, as some end users held back on buying amid "wait-and-see" sentiment toward dom

Scan to download sxcoal.com mobile APP