Natural gas futures were surging in early-morning trading Friday as the market reacted to reports of volumes being shut in at a Columbia Gulf compressor station in Mississippi following a lightning strike.
After trading around $2.300/MMBtu as of 8 a.m. ET, the June contract quickly shot up to above $2.500 shortly after 8:30 a.m. ET. The front month was up 9.4 cents to $2.449 as of around 8:45 a.m. ET.
Real-time discussions on energy chat platform Enelyst pointed to breaking news of a major fire on part of the Columbia Gulf system in Mississippi as the catalyst for sudden buying pressure in natural gas futures.
On its electronic bulletin board, Columbia Gulf said it had reduced to zero all volumes through its Corinth Compressor Station in Mississippi because of a fire “resulting from a suspected lightning strike during severe storms in the area early Friday morning.”
The operator said it anticipated an impact to firm service transportation of 400,000 Dth for that part of its system.
As for the latest weather trends, the 11- to 15-day (May 8-12) forecast map from Maxar’s Weather Desk Friday advertised a combination of above normal conditions for northern portions of the Lower 48, with cooler-than-normal temperatures for areas farther south and east.
“A strong ridge is over western and central Canada during the six- to 10-day period, with models broadening the feature along the Northern Tier during the 11- to 15-day,” Maxar said. “Above normal temperatures favor the Rockies to North-Central under the ridge, including the Upper Midwest late. Alternatively, below normal temperatures are from the Midwest to the South and East at the start of the period, with belows fading to the South during the second half.
Meanwhile, the Energy Information Administration (EIA) on Thursday reported a 79 Bcf injection into U.S. natural gas storage facilities for the week ending April 21. The build lifted inventories to 2,009 Bcf, a 365 Bcf (plus 22.2%) surplus to the five-year average, according to EIA.
“Compared to degree days and normal seasonality, this week’s reported withdrawal appears loose by approximately 0.5 Bcf/d versus the prior five-year average,” Wood Mackenzie analyst Eric McGuire said in a note to clients Friday. This is “looser than last week but still tighter than the roughly 2.7 Bcf/d loose average of the previous two months.”
