- October collects 11.9 cents to $ 2,933, in November 11.7 cents to $ 2,869
- "Today was a cash-led future," says Saal of INTL FCStone
- "The cash strength exceeded all expectations" because the bursts of the nukeine burns worsened, says Bespoke
- Duke & # 39; s 1,870 MW Brunswick is still planning down Tuesday; Transco Zone 5 spot prices are up 26 cents to $ 3.38
Do not call it a comeback, but bulls with a natural gas dam have re-confirmed Tuesday, using strong cash prices and signs of persistent, weather-driven demand to gather a market in need of a mild fall season to reduce depleted supplies to fill. Spot prices rose in the Mid-Atlantic when the cash base in Western Texas weakened; the NGI National Spot Gas Average added 3 cents to $ 2.75 / MMBtu.
October Nymex futures rose 11.9 cents to $ 2,933, a massive rally in the context of what a range-bound market had been. November picked up 11.7 cents to $ 2,856, while January added 9.8 cents to $ 3.05.
Storage inventories that are below the minimum of five years with just a few weeks remaining in the injection season may typically cause a futures rally this time of year, but the backwardation in the market suggests that this did not happen Tuesday, according to INTL FCStone Financial Inc . Senior vice president Tom Saal.
The physical prizes at Henry Hub climbed 7 cents on average to $ 2.97 on Tuesday and continued to trade before the October contract. At the end of last week, the day-ahead prices on the Hub were around 15-20 cents for the prompt-month futures.
"Today was a cash-led future, which is not always the case," Saal said NGI. Even with the current meager stocks, "they're pulling gas out of storage, I can tell you right now, I can take the gas out of storage and sell it for $ 3 … and I can replace it with gas that's cheaper. …
"We have little stock based on historical levels, but the market believes that production is so robust that we will not need the storage we have had in recent years."
Saal noted bullish impacts in the aftermath of the former hurricane Florence, mainly due to ongoing nuclear failures, as it would help strengthen strength in the physical market.
According to the Energy Information Administration (EIA), the 1,870 MW Brunswick Duke Energy nuclear power plant in North Carolina remained completely offline, while predictions in the southeast and mid Atlantic ocean were high temperatures in the coming days.
Meanwhile, from 10 am ET, about 332,000 customers were left without power behind Florence, mostly in North Carolina, with affected utilities that had already restored power to 1.6 million customers since the storm hit the East Coast, according to the Edison Electric Institute.
The spot prices at Transco Zone 5 increased by 26 cents to $ 3.38 Tuesday after seeing similar gains on Monday. Further north also Transco Zone 6 New York came to a good end and jumped 19 cents to $ 3.27.
Relics from Florence were expected to continue to drip Tuesday in the Northeast, according to NatGasWeather.
"In the aftermath of the storm, the very hot high pressure will continue to expand to dominate most of the country, hottest in the southern US, where the highs will reach the upper 80s to mid-90s," the firm said. . "It will also be warmer than normal in the greater part of the northern United States, but for this time of the year this means a relatively slight demand for heights in the 70s and 80s."
Tailor-made weather services said it was looking for strong cash prices that went to the Tuesday session.
"Nevertheless, the cash strength was higher than all expectations, because the burns were even tightened up in the middle of the failure of nuclear power stations in the southeast and the wind generation was limited," said Bespoke. "Combined with production from highs and intense heat in the short term, it was enough for cash to save more than $ 3 and thus raise the front of the strip … Our next significant resistance level is right at $ 2.98, and with heat that lingers Thursday some cash power is expected "Wednesday.
However, tailor-made analysts said that Tuesday is a "perfect storm" of bullish fundamental factors between intense short-term heat, cold-risk long-distance risks for early October, tighter burns, lower production, and a zero-outage "and a flat spread from October / November.
Bespoke does not expect long-term cold risks in recent guidelines "to be adequately sustained until October to seriously increase the demand for heating."
In the meantime, estimates to date for this week's MER storage report suggest that the average average deficit on an annual basis could shrink as the deficit on an annual basis increases.
The desk's Early View storage inspection produced an average build of 80.7 Bcf for the week ending September 14, based on answers ranging from 50 Bcf to 94 Bcf. Intercontinental Exchange (ICE) EIA financial weekly index futures arranged Monday at a build of 83 Bcf. Last year the MEB registered an injection of 96 Bcf for the period, while the five-year average is a build of 76 Bcf.
Meanwhile, ICE traders continue to lower their inventory expectations by the end of the storage index futures at the start of the recapitulation season, as the 4 Bcf contract declined on Monday to reach 3,321 Bcf.
Tuesday's rally showed that the market was more interested in the potential increase in demand versus the continued lower supply growth of 48 years, which had put prices under pressure for months.
Analysts expect growth to continue, driven by what the global consulting firm Energy Aspects recently predicted as a "flood of Appalachian offerings" over the next few weeks.
"After registering weekly production records every week since the end of July, the Appalachia revenues stagnated somewhat at the beginning of September," says Energy Aspects. "Receipts of 29.5 Bcf / d in the region increased by only 0.1 Bcf / d" week / week (g / g) from the end of last week ", after the week ending 7 September, the regional receipts decreased by 0 , 1 Bcf / dw / w. "
The company attributed part of the slowdown in growth to Leach XPress and the recent explosion on an LP gathering system from Energy Transfer Partners in western Pennsylvania.
"Even with this recent stagnation, the Appalachia output of 29.4 Bcf / d in September is still 0.6 Bcf / d month / month and 5.0 Bcf / d year / year" of new infrastructure additions, including the start-up of Rover & # 39; s Majorsville and the side arms of Burgettstown, "marking two steps forward to go back past the recent step".
Looking at other money transactions on Tuesday, prices in most of the Midwest rose in line with the profits at Henry Hub. Radiant Solutions called for temperatures in Chicago that remain far above normal this week, with highs that may reach the low 90s by Thursday. Chicago Citygate added 8 cents to $ 2.97.
Meanwhile, West Texas saw the basic differences weaken as prices moved in the opposite direction from the modest gains made in the rest of the Lone Star State.
Waha gave 3 cents to $ 1.67, while El Paso Perm dropped a cent to $ 1.73.