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US Natural Gas Update: Futures Rise Despite Storm Threat to Export Facilities

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US natural gas futures extended modest gains in after-hours trade on Wednesday as traders weighed the risk that Tropical Storm Bertha could disrupt LNG export operations along the US Gulf Coast, potentially reducing gas exports and leaving more supply in the domestic market.

The front-month Henry Hub contract and the continuous contract both edged up by 1.12% to $2.982 per MMBtu.

The session was described as largely range-bound by the Energy Buyers' Guide, as natural gas futures settled marginally higher after consolidating above last Thursday's 2.25-month low.

The Energy Buyers' Guide said natural gas futures ended Tuesday's session little changed following a quiet and largely directionless trading day. Prices opened modestly lower before recovering through the session, leaving most contracts within one to two cents of Monday's settlement.

Similarly, Gelber & Associates said the market was fairly quiet as stronger cooling demand across the South and central US is being offset by cooler weather in the East,

The focus moved to Tropical Storm Bertha, which is forecast to move along the northern Gulf Coast over the next several days, raising concerns over possible disruptions to LNG export facilities in the region, potentially causing natural gas to back up into the already amply supplied domestic market.

Meanwhile, Barchart, citing BNEF data, said total demand for natural gas across the lower 48 states rose to 80.5 billion cubic feet per day on Tuesday, up 2.1 Bcf/d from Monday and 5.5% higher than a year earlier. Celsius Energy reported Monday power-sector gas burn at 46 Bcf/d, an increase of 1.7 Bcf/d from the previous day and 3.6 Bcf/d above year-ago levels.

On the supply side, lower-48 dry gas production eased to 111.3 Bcf/d on Tuesday, down 1.7 Bcf/d from the previous day, although output remained 2.5% higher than a year earlier.

Meanwhile, estimated LNG feed gas deliveries to US export terminals rose to 18.0 Bcf/d on Tuesday, up 0.6% from a week earlier, according to BNEF data.

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