NYMEX September natural gas futures were little changed in the contract's first day in the lead position. Trade was muted and held within a $2.936/MMBtu to $2.983/MMBtu trading range Friday, July 28. The contract closed the session 2.6 cents lower on the day at $2.941/MMBtu.
A small 17-Bcf injection into natural gas inventories reported by the U.S. Energy Information Administration on July 27 that covered the week to July 21 reflected a week that included the heaviest day for power burn thus far this injection season on July 20, when the power sector consumed more than 41 Bcf of natural gas for use in power generators.
But overall, the demand for natural gas for power burn from April 1 through July 25 averaged 27.1 Bcf/d, which is 7% below last year's consumption over the same period, the EIA said in a July 27 Today in Energy report.
After the recent ramp up in power-sector consumption, weather forecasts imply a return to modest demand as temperatures are slated to moderate to average and below-average across the eastern half of the country.
The six- to 10-day map from the National Weather Service shows above-average temperatures in the Northeast and a portion of the mid-Atlantic and Florida, as well as across the West into the west north central and in a few areas of Texas.
Over the longer-range eight- to 14-day period, above-average temperatures expand to include the northern tier, portions of the mid-Atlantic, the southeast coast, an area of Texas and the entire western third of the country.
Still, the below-average and average temperatures forecast in the majority of the central and eastern U.S. through both periods should limit demand for cooling and allow for a ramp up in storage injections, as participants begin to look more intently toward supply outlooks at the end of October.
The net 17-Bcf injection into natural gas inventories in the Lower 48 during the week ended July 21 was below market consensus ahead of the report's release that called for a 27-Bcf build to stocks and was well below respective year-ago and five-year average injections of 20 Bcf and 47 Bcf.
The build brought total U.S. working gas supply to 2,990 Bcf, or 302 Bcf below the year-ago level and 111 Bcf above the five-year average storage level of 2,879 Bcf.
Even as the deficit to the year-ago level widened and the surplus to the five-year average was trimmed, the market discounted the more bullish implications for a still bearish overall storage outlook for the end of the injection season.
Weekly injections into the working gas supply in the remaining weeks of injection season are expected to build the total working gas supply to near 4.0 Tcf. The EIA expects an end-of-October supply at 3,940 Bcf, while the American Gas Association expects a slightly smaller total close to 3.8 Tcf.
Trade in the day-ahead market for the typically revised Saturday-through-Monday package was done at mostly reduced prices amid declining demand due to the weekend and weather.
Transco Zone 6 NY traded about 15 cents lower to an index below $1.75, Tetco-M3 traded down nearly 10 cents to an index below $1.65, Henry Hub trades were about 1 cent lower to an index near $2.90, Waha shed more than 1 cent to an index near $2.70 and a less-than-1-cent loss at Chicago brought the index below $2.80. The market at the SoCal Border was down nearly 10 cents to near $2.75 while PG&E Gate traded less than 1 cent lower to an index below $3.30.
Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power, natural gas index prices, as well as forwards and futures, visit our Commodities Pages.