In an EBW Analytics Group report despatched to Rigzone by the EBW workforce on Monday, Eli Rubin, an vitality analyst on the firm, famous {that a} “bullish climate shift spark[ed]… [a] pure fuel revival”.
“After testing as little as $2.893 per million British thermal items (MMBtu) intraday Friday – and with weekend Henry Hub spot costs falling to $2.66 [per MMBtu] – a cooler weekend climate shift has revived bullish fortunes for the November contract,” Rubin mentioned within the report.
“Additional, weekly common LNG was at a report excessive over the weekend and pure fuel manufacturing readings slumped within the Permian and Marcellus,” Rubin added.
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Within the report, Rubin famous that “some meteorologists replicate a bigger heating demand achieve, serving to to elucidate the pop on the entrance of the curve”.
“Cooler climate (the subsequent three EIA [U.S. Energy Information Administration] weeks are anticipated to be under long-term normals) slashes dangers of bearish outcomes akin to early November 2024,” Rubin mentioned.
The vitality analyst acknowledged within the report that “shorts masking some positions seemingly underlies the market response larger”.
“Nonetheless, lofty storage, delicate climate, and returning manufacturing stay,” Rubin warned within the report.
“The $3.22-3.24 per MMBtu degree is a key technical battleground, nonetheless, and if climate fashions proceed colder or bulls carry November above key resistance, prolonged near-term upside potential might happen,” he added.
EBW’s report highlighted that the November pure fuel contract closed at $3.008 per MMBtu on Friday. This was up 7.0 cents, or 2.4 p.c, from Thursday’s shut, the report outlined.
In a separate EBW report despatched to Rigzone by the EBW workforce on Friday, Rubin warned that “close to to medium time period pure fuel weak point lengthen[ed]”.
“Yesterday’s [Thursday] EIA-reported 80 billion cubic foot injection confirmed a lofty storage trajectory, driving the November 2025 pure fuel contract to submit its first sub-$3.00 per MMBtu shut in 4 years,” Rubin mentioned in that report, which highlighted that the November pure fuel contract closed at $2.938 per MMBtu on Thursday. This was down 7.8 cents, or 2.6 p.c, from Wednesday’s shut, the report outlined.
“The South Central continues to pare storage surpluses amid constructive regional fundamentals, however technicals indicating additional bearish danger and a weak seasonal backdrop recommend draw back,” Rubin famous on this report.
“Late-season tropical exercise might emerge subsequent week,” he added.
In that report, Rubin warned that “continued delicate climate into Week 3 is primed to increase the injection season into November.”
“Estimates of present storage are close to 3,800 Bcf, with one other 4-5 weekly builds forward. Seasonally suppressed provide is prone to rebound – providing one other bearish medium-term headwind,” he mentioned.
“Traditionally, storage peaking above 3,900 Bcf has translated to November pricing sub- $2.75 per MMBtu. We stay bullish on long-term fundamentals, however filling storage, delicate climate and rebounding manufacturing are prone to weigh on pricing near-term,” Rubin went on to state in that report.
In its newest weekly pure fuel storage report, which was launched on October 16 and consists of information for the week ending October 10, the EIA mentioned working fuel in storage was 3,721 Bcf as of October 10, in response to its estimates.
“This represents a internet enhance of 80 Bcf from the earlier week,” the EIA highlighted in its report.
“Shares had been 26 Bcf larger than final 12 months right now and 154 Bcf above the five-year common of three,567 Bcf. At 3,721 Bcf, whole working fuel is throughout the five-year historic vary,” it added.
The EIA’s subsequent weekly pure fuel storage report is scheduled to be launched on October 23. It should embrace date for the week ending October 17.
In a BMI report despatched to Rigzone by the Fitch Group on October 10, BMI projected that the entrance month Henry Hub pure fuel worth will common $3.50 per MMBtu in 2025 and $3.80 per MMBtu in 2026.
In a report despatched to Rigzone by the Customary Chartered workforce on October 8, Customary Chartered forecast that the NYMEX foundation close by future Henry Hub pure fuel worth will common $3.55 per MMBtu this 12 months and $4.03 per MMBtu subsequent 12 months.
In its newest brief time period vitality outlook (STEO), which was launched on October 7, the EIA lowered its Henry Hub pure fuel spot worth forecast for each 2025 and 2026.
In response to that STEO, the EIA sees the commodity coming in at $3.42 per MMBtu in 2025 and $3.94 per MMBtu in 2026. In its earlier STEO, which was launched in September, the EIA projected that the Henry Hub pure fuel spot worth would common $3.52 per MMBtu this 12 months and $4.28 per MMBtu subsequent 12 months.
To contact the writer, electronic mail andreas.exarheas@rigzone.com
