NEW YORK: US natural gas futures slipped more than 1% on Friday, weighed down by lower demand forecasts for next week and oversupply of fuel left in storage.
Front-month gas futures for October delivery on the New York Mercantile Exchange fell 1.9 cents or 0.8% to $2.33 per million British thermal units (mmBtu) by 09:58 a.m. EDT (1358 GMT), after rising to its highest since Sept. 16 at $2.38 per mmBtu, earlier in the session.
However, the contract gained about 0.8% so far this week, heading for its fourth straight weekly gain.
“Power burns have also been strengthening over the last few days which again is another factor that’s certainly helping demand, but that’s somewhat offsetting slightly weaker LNG and I think that there’s a lot of moving pieces today and the market is pretty much undecided as to where to go in the near term, said Robert DiDona of Energy Ventures Analysis.
Financial firm LSEG estimated 122 cooling degree days (CDDs) over the next two weeks, lower than 124 CDDs forecasted on Thursday. The normal for this time of year is 86 CDDs.
Cooling degree days, used to estimate demand to cool homes and businesses, measure the number of degrees a day’s average temperature is above 65 degrees Fahrenheit (18 degrees Celsius).
LSEG forecast average gas demand in the Lower 48, including exports, at 99.6 billion cubic feet (bcfd) per day this week to 98.7 bcfd next week.
LSEG forecast average gas supply in the Lower 48, including exports, at 101.8 bcfd this week to go up to 101.9 bcfd next week.
LSEG said gas output in the Lower 48 US states slid to an average of 102.0 bcfd so far in September, down from 103.2 bcfd in August.
On Thursday, the US Energy Information Administration (EIA) said utilities added 58 billion cubic feet (bcf) of gas into storage during the week ended Sept. 13, which was still about 8% more gas in storage than normal for this time of year.
Meanwhile natural gas production has begun earlier than planned at Argentina’s Fenix offshore field, French oil major TotalEnergies said on Friday. The $700 million project, initially scheduled to begin operating in November, has a production capacity of 10 million cubic meters of natural gas per day, representing 8% of Argentina’s total production and about 7% of annual consumption.
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