Natural Gas Price Fundamental Daily Forecast – Storage Containment Risk Back in Play.

Natural gas futures are edging lower on Friday as traders continued to react to yesterday’s bearish government storage report and the slow pace of feed gas demand at Gulf Coast export facilities as they try to recover from the devastation caused by Hurricane Laura two weeks ago.

At 09:22 GMT, November natural gas is trading $2.769, down $0.029 or -1.04%.

Energy Information Administration Weekly Storage Report

The EIA reported Thursday that domestic supplies of natural gas rose by 70 billion cubic feet for the week-ended September 4. That was higher than the increase of 64 Bcf forecast by analysts polled by S&P Global Platts, but inside the range of guesses.

According to Natural Gas Intelligence (NGI), “For Thursday’s U.S. Energy Information Administration (EIA) storage report covering the week ended Sept 4, a Bloomberg survey found estimates ranging from 60 Bcf to 73 Bcf, with a median of 68 Bcf, while a Reuters poll found estimates ranging from 62 Bcf to 73 Bcf and a median of 69 Bcf. NGI estimated an injection of 71 Bcf.

Total stocks now stand at 3.525 trillion cubic feet, up 528 Bcf from a year ago, and 409 Bcf above the five-year average, the government said.

LNG Demand Updates

Although feed gas operations have resumed at the Sabine Pass liquefied natural gas (LNG) facility and feed gas has risen, the damage to prices has been too much to overcome following a cooler turn in the weather put storage containment risk back in play.

Short-Term Weather Outlook

According to NatGasWeather for September 11 to September 18, “An unseasonably cool weather system will fizzle over the Rockies and Plains, the next few days with temperatures of 50s and 60s the next couple days as temperatures warm back into the 60s and 70s. The East remains warm to very warm with highs of 70s to low 90s, while hot over the West with upper 80s to 100s. Texas and the rest of the southern U.S. will warm back into the 80s to lower 90s this weekend through much of next week. Overall, national demand will be moderate to low.

Daily Forecast

Light national demand due to cool to comfortable weather patterns combined with the large storage build and the slow pace of the LNG demand recovery should continue to weigh on prices on Friday. However, don’t get lazy because there is always the possibility of a short-covering rally ahead of the weekend.

We’ve hit the peak of hurricane season so we are seeing a lot of activity in the Atlantic. Our major concern will be activity in the Gulf. As we saw with Hurricane Laura, production facilities will be at risk if a tropical storm or hurricane materializes. Continue to monitor the reports from the National Hurricane Center for updates.