The October contract jumped 29.1 cents day on day and settled at $2.125/MMBtu yesterday. The prompt month had dropped more than 20 cents over the two previous trading sessions. November also bounced back Wednesday from a substantial drop the prior day and gained 19.7 cents to $2.794. The move on the October Futures contract was on lower volume and small open interest. Most traders have already moved their positions to November. CME October OI dropped by 15,059 to 21,267. Current CME November OI is 291,520 – almost unchanged day on day.
Production and LNG continue to be volatile making it difficult to assess where end of Oct storage ends up. On the production side, we observed a big drop in production for yesterday gas day in the South Central and Northeast. Outright levels look to be 4 Bcf/d lower than where it was just last week.
LNG feedgas volumes have somewhat resumed with Sabine and Freeport resuming operations after TS Beta moved through the gulf coast line. Today’s nomination data shows overall LNG deliveries at 6.1. This with both Cove Point out for maintenance and Cameron not restarted yet. Entergy is making good progress in returning power to LA customer, but Cameron has not be powered up according to their outage map. The expected date was September 27th.
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Today’s Fundamentals:
Daily US natural gas production is estimated to be 84.4 Bcf/d this morning. Today’s estimated production is +0.74 Bcf/d to yesterday, and -2.18 Bcf/d to the 7D average.
Natural gas consumption is modelled to be 66.9 Bcf today, +1.67 Bcf/d to yesterday, and +0.81 Bcf/d to the 7D average. US power burns are expected to be 33.54 Bcf today, and US ResComm usage is expected to be 8 Bcf.
Net LNG deliveries are expected to be 6.1 Bcf today.
Mexican exports are expected to be 6.2 Bcf today, and net Canadian imports are expected to be 3.6 Bcf today.
Bloomberg IM: Het Shah
enelyst DM: @het.co
Tel: 917-975-2960
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