Natural Gas News: Can a Tight EIA Report Turn $3.00 Into a Breakout?

Thursday’s EIA report is expected to show a 32 Bcf injection for the week ended August 28. That number decides whether buyers can finish the job above $3.00.

Hotter Forecasts Are Extending Power Burns Into Mid-September

The weather models turned hotter across the Midwest and East for September 7-11 and shifted warmer across the Midwest for September 12-16. Air conditioners are still running in the major population centers at the point of the year when cooling demand normally starts to fade.

Lower-48 gas demand was estimated at 79.5 Bcf per day Wednesday, up 7.6% from a year ago. The heat is keeping the summer demand story alive deeper into September than traders expected.

The weather risk runs both ways. September forecasts can change quickly. Tropical systems and one cooler model run can take power demand away in a hurry. Wednesday’s rally showed traders are not waiting for that shift. They are trading the heat in front of them.

LNG and Europe Are Pulling From the Same Side

LNG feedgas was estimated at 18.8 Bcf per day Wednesday, near the strongest levels of the year. Freeport and Corpus Christi are both back from maintenance and Golden Pass is still ramping up. Gulf Coast export plants are competing with Texas power generators for the same gas while the South remains hot.

European storage stood near 65% full at the end of August against a five-year seasonal average near 82%. European gas prices reached their highest level in years Wednesday. About 10% of Europe’s gas supply moves through the Strait of Hormuz from Qatar. The waterway is not operating normally. U.S. cargoes are not losing buyers with that kind of deficit heading into winter.