GAS PRICES: ABOVE $3,05
PLATTS - The NYMEX April natural gas contract continued to march higher Tuesday, climbing 5.2 cents to settle at $3.093/MMBtu on a tightening supply-demand balance characterized by strong LNG feedgas deliveries, March demand above year-ago levels and a 2.8 Bcf/d year-on-year dip in production.
"Late season cold strengthened the heating demand and LNG exports revived," helping to provide support to a sustained recovery of the prompt-month contract throughout March, Viraj Sawant, energy market analyst with Gelber & Associates stated, echoing the tightening supply-demand balance.
Total US demand for March to date maintains a 5.5 Bcf/d margin above 2016 levels, reaching an average around 82.3 Bcf/d. Total US dry gas production has dipped 2.8 Bcf/d from a year ago to reach a March to date average of 70.8 Bcf/d, resulting in a tighter supply-demand balance.
LNG feedgas has been a key outlet for US natural gas production during an otherwise lackluster winter in the continental US, with feedgas to Sabine Pass reaching an average of 1.8 Bcf/d in 2017, topping out at a daily record of 2.4 Bcf/d on March 14.
As the market moves toward the final weeks of winter, storage inventories will weigh heavily on the movement of the prompt month as it becomes clearer the margin of overhang stocks will maintain going into injection season.
Preliminary projections for the two upcoming weeks show a combined 208-Bcf withdrawal from storage, possibly providing support to the bulls that storage inventories could trend closer to the five-year average and widen the gap with year-ago levels.
If projections come to fruition, the combined total would greatly outpace historical data, with the five-year averaging totaling a 48-Bcf withdrawal during the corresponding period, and year ago showing a 6-Bcf pull.
The April contract traded in a range of $3.033/MMBtu to $3.113/MMBtu, increasing the week's gains to 14.5 cents after Monday's 9.3-cent jump.
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U.S. EIA - Energy companies’ free cash flow—the difference between cash from operations and capital expenditure—was $119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum during 2013–18 Companies reduced debt for seven consecutive quarters, contributing to the lowest long-term debt-to-equity ratio since third-quarter 2014
OPEC - Total oil demand for 2018 is now estimated at 98.82 mb/d. In 2019, world oil demand growth is forecast to rise by 1.41 mb/d. Total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.
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PLATTS - The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.