Despite the small price decline on Friday, the front-month was still about 26% over a recent three-year low of $2.029 per mmBtu on Aug. 5, keeping it in overbought territory for a ninth day in a row for the first time since December 2016. For the week, the contract was on track to rise about 3%, putting it up for a third week in a row. The premium of futures for November over October, meanwhile, fell to around 3 cents/mmBtu, its lowest on record since the contracts started trading in 2008, according to data provider Refinitiv.
With the weather slowly cooling with the coming of autumn, data provider Refinitiv projected demand in the Lower 48 US states would slide to 84.9 billion cubic feet per day (bcfd) next week and 83.6 bcfd in two weeks from 86.8 bcfd this week as power generators consume less fuel to keep air conditioners humming.
Refinitiv's latest forecast for next week was lower than its earlier projection on Thursday of 85.7 bcfd. As power generators burn less gas, traders said they expect LNG and pipeline exports to increase through the rest of September.
Gas flows to LNG export plants rose to 6.4 bcfd on Thursday as Cheniere Energy Inc's Sabine Pass terminal in Louisiana started taking more gas, up from an average of 5.8 bcfd since the start of September when Cheniere shut Train 5 at Sabine for planned maintenance, according to Refinitiv data.
Separately, some traders said Sempra Energy's Cameron export plant had a force majeure earlier in the week. Gas flows to the Cameron plant, however, have held near 0.5 bcfd all week, according to Refinitiv data. In two weeks, Refinitiv projected flows to LNG terminals could rise to a record high 6.9 bcfd.
Exports to Mexico, meanwhile, have held around 5.1 bcfd over the past two weeks as the market continued to wait for the startup of the 2.6-bcfd Valley Crossing and Sur de Texas-Tuxpan pipes after TC Energy Corp and Sempra's IENOVA unit resolved pipeline contract disputes with Mexico's Federal Electricity Commision in late August.
Analysts said utilities likely added 84 billion cubic feet (bcf) of gas into storage during the week ended Sept. 13. That compares with an injection of 84 bcf during the same week last year and a five-year (2014-18) average build of 82 bcf for the period.
If correct, last week's addition would boost stockpiles to 3.103 trillion cubic feet (tcf), 2.4% below the five-year average of 3.178 tcf for this time of year.
The amount of gas in inventory has remained below the five-year average since September 2017. It fell as low as 33% below that average in March 2019. But with production near a record high, analysts said, stockpiles should reach a near-normal 3.7 tcf by the end of the summer injection season on October 31.