NEW YORK: US natural gas futures on Wednesday climbed toward a two-and-half year peak scaled earlier this week as key production facilities in the US Gulf of Mexico remained offline while energy firms assessed the aftermath of Hurricane Ida.
A total of 1.705 million barrels per day of oil production and 2.107 billion cubic feet per day (bcfd) of natural gas output remain shut following evacuations at 278 platforms due to Hurricane Ida, the Bureau of Safety and Environmental Enforcement said on Tuesday.
“There have been some shut-ins recorded because of the recent storm and that has helped push the market higher. When supply is restored, the market will start to ease off,” said Thomas Saal, senior vice president, energy at StoneX Financial Inc.
Front-month gas futures for October delivery gained 8 cents, or 1.8%, to $4.457 per million British thermal units (mmBtu) by 9:15 a.m. EDT (1315 GMT), after jumping as high as $4.495 per mmBtu. Data provider Refinitiv said total US production averaged 92.0 bcfd in August, versus 91.6 bcfd in July. That compares with an all-time monthly high of 95.4 bcfd in November 2019.
However, the market is still a little short on inventory, so that could keep prices from falling a lot, Saal added.
The amount of gas flowing to US LNG export plants has slipped to an average of 10.5 bcfd in August from 10.8 bcfd in the previous month, and much below April’s 11.5 bcfd record.
US pipeline exports to Mexico dipped to an average 6.2 bcfd in August from July’s 6.6 bcfd, and a monthly record of 6.7 bcfd in June.
With a cooler season around the corner, Refinitiv projected average US gas demand, including exports, would slide from 94.3 bcfd last week to 92.4 bcfd this week, as power generators burn less of the fuel with air conditioning demand easing.
Comments
Comments are closed.