U.S. natural gas futures were little changed on Monday on forecasts for steady demand over the next two weeks even as cash prices in West Texas fell into negative territory.

Front-month gas futures for October delivery on the New York Mercantile Exchange rose 0.1 cent to $2.942 per million British thermal units (mmBtu).

In the spot market, gas prices at the Waha Hub (NG-WAH-WTX-SNL) in the Permian shale in West Texas turned negative as autumn pipeline maintenance and other constraints trapped gas in the nation’s biggest oil-producing basin.

In the tropics, the U.S. National Hurricane Center said a disturbance in the central Atlantic had an 80% chance of strengthening into a tropical cyclone over the next seven days as it moves northwest across the Atlantic Ocean. The system, however, is not expected to reach land in North America during that time.

Even though storms can boost gas prices by cutting output along the U.S. Gulf Coast, they are more likely to reduce prices by shutting LNG export plants and knocking out power to homes and businesses. About 40% of the power generated in the U.S. comes from gas-fired plants.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 states fell to 107.6 billion cubic feet per day so far in September, down from a record monthly high of 108.3 bcfd in August.

Record output earlier this year allowed energy companies to inject more gas into storage than usual so far this summer. There was about 6% more gas in storage than normal for this time of year, and analysts said they expect that percentage to mostly grow in coming weeks.

Meteorologists forecast the weather will remain warmer than normal through at least September 30. That heat should boost the amount of gas power generators burn to keep air conditioners humming.

LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 102.5 bcfd this week to 103.1 bcfd next week. Those forecasts were in line with LSEG’s outlook on Friday.

The average amount of gas flowing to the eight big U.S. LNG export plants slid to 15.6 bcfd so far in September, down from 15.8 bcfd in August. That compares with a monthly record high of 16.0 bcfd in April.

In other LNG news, Berkshire Hathaway Energy’s 0.8-bcfd Cove Point plant in Maryland is scheduled to shut soon for about a month of planned annual autumn maintenance.
Source: Reuters