Natural gas futures were pushing higher at the front of the curve through midday trading Thursday after the latest government-reported inventory build landed on the leaner side of market expectations.
Here’s the latest:
- June Nymex futures up 10.8 cents to $2.295/MMBtu as of 2:13 p.m. ET
- Reported 79 Bcf storage build from U.S. Energy Information Administration (EIA) seen indicating tight underlying balances
“Compared to degree days and normal seasonality, this week’s report is 3.7 Bcf/d tight versus the prior five-year average,” Wood Mackenzie analyst Eric McGuire said. “This is a tightening of 4.8 Bcf/d week/week. The previous five weeks have averaged 0.8 Bcf/d loose.”
Despite the bullish post-report response from the market, the surplus versus the five-year average barely budged week/week with the latest EIA print. Total Lower 48 storage finished at 2,563 Bcf as of May 3, or 640 Bcf higher than the five-year. The year-on-five-year surplus was 642 Bcf in the week-earlier period.
- Permian spot prices still getting crushed as maintenance outlook points to more constraints ahead
- Waha down 77.0 cents to negative-$3.105, per NGI’s MidDay Price Alert
Kinder Morgan Inc.’s Permian Highway Pipeline (PHP) will be flowing at reduced capacity for a while longer after determining a part at one compressor station needed replacing, according to a notice from the operator. The maintenance, which began this week, was previously expected to conclude this weekend. However, PHP said it will now also be flowing at slightly reduced capacity from Monday through May 17.
“While this is only a 0.2 Bcf/d restriction versus nameplate capacity, it now overlaps with the next round of Gulf Coast Express (GCX) maintenance,” Wood Mackenzie analyst Kara Ozgen said in a note to clients Thursday.
Combined restrictions on GCX and PHP will total 0.34 Bcf/d for several days next week, Ozgen estimated.
“This is not far off from the 0.37 Bcf/d of GCX capacity that was offline during its first round of maintenance, when we saw subdued and volatile Waha cash prices,” the analyst said.
- Southeast hubs pulling back as heat moderating
- Transco Zone 4 off 20.0 cents to $2.235, according to MidDay Price Alert
Above normal temperatures in Atlanta Wednesday were expected to flip to slightly below normal by the weekend, including highs in the mid-70s and lows in the mid-50s, according to Maxar’s Weather Desk.
