Price Volatility Looms as NYMEX September Natural Gas Futures Move to Expiry:
Following a volatile week of trading, NYMEX front-month natural gas futures prices ended last week with a small loss as buyers failed to retest the $10.00/MMBtu seen earlier in the week. At the end of trading on August 26, the NYMEX September 2022 gas futures contract lost 7.9 cents to close at $9.296/MMBtu. On Tuesday, after hitting an intraday high of $10.028/MMBtu for the first time since 2008, prices lost some modest steam over the week amid roller-coaster trading action to finish the week with a tiny 0.5% loss. Today may bring some additional topsy-turvy trading action as the NYMEX September gas futures contract will expire at the end of trading.
The price weakness stemmed from significantly near-term overbought technical indicators and information that the Freeport LNG export terminal would not become operational until at least early-to-mid November, instead early October. Sellers also garnered some additional influence from the weather forecast models showing cool and rainy conditions across the southern tier of the US through at least mid-September.
Over the weekend, some tug-of-war catalysts developed that are likely to create some fights between gas market bulls and bears this week. While cooler temperatures are forecast for Texas and the Gulf coast for the next couple of weeks, the near-term temperature outlook across the northern tier of the US trended warmer during the first week of September, which could produce some upper-80s temperatures in the Midwest and Northeast. However, the gas market bears point to September as the start of the lower demand ‘shoulder season’ when cooling demand starts to fade from the highs.
On the more bullish side of the spectrum, the Calcasieu LNG export facility made some new volume highs, which ran up to 1.7 Bcf/d over the weekend and is presently running at 90% capacity. While this is somewhat bullish news, the early cycle of flows for all LNG feedgas volumes is at around 10.5 Bcf/d as of this morning, even when accounting for Calcasieu gas.
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