Pure fuel costs at Henry Hub have surged to their highest ranges since June, pushed by forecasts of colder than regular temperatures within the coming weeks and supported by sturdy LNG export flows.
That’s what Ole R. Hvalbye, a Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), instructed Rigzone when requested why the pure fuel value is rising as we speak.
“The most recent Nationwide Oceanic and Atmospheric Administration (NOAA) short-term forecast (6-14 days) predicts colder than regular temperatures spreading from the West Coast, with below-average situations anticipated throughout a lot of the nation, apart from the Gulf Coast and East Coast,” Hvalbye stated.
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“Including to the bullish sentiment, feedgas provide to U.S. LNG export terminals has climbed to 14.07 billion cubic toes per day, the best degree since January 2024, in accordance with BNEF,” he added.
“This marks a major improve from final week’s common of 13.5 billion cubic toes per day. Moreover, export flows to Mexico are estimated at 6.6 billion cubic toes per day as we speak, highlighting sturdy demand from the area,” he continued.
The SEB analyst stated “home pure fuel manufacturing within the U.S. is estimated at 101.8 billion cubic toes per day as we speak, barely beneath final week’s common of 102.4 billion cubic toes per day, in accordance with Bloomberg”.
“In the meantime, demand for nat fuel throughout the Decrease 48 states has risen to 79.3 billion cubic toes per day however stays beneath the five-year common of roughly 82.7 billion cubic toes per day,” Hvalbye added.
The SEB analyst additionally famous that the EU fuel market is seeing upward value strain and said that, in Asia, the LNG market stays sturdy, with demand anticipated to remain excessive amid intensifying international competitors for LNG cargoes throughout the winter months.
When he was requested why the pure fuel value is rising as we speak, Artwork Hogan, Chief Market Strategist at B. Riley Wealth, instructed Rigzone that “there are a few catalysts in as we speak’s transfer in pure fuel costs”.
“After three days of good points, the December fuel futures contract is up one other 11.4 cents to $3.112 per million British thermal models (MMBtu). That took out technical resistance at $3.10, which tends to get up merchants,” he added.
“The opposite catalyst sits with the freezing in a single day lows within the North and the chance of extra widespread wintry climate in coming weeks,” he continued.
Phil Flynn, a Senior Market Analyst on the PRICE Futures Group, instructed Rigzone that “we’re seeing a blast of winter climate give pure fuel a lift”.
Flynn warned that “conflicting headlines on how lengthy the chilly goes to final and whether or not or not it’ll affect manufacturing proceed to make the rounds” and stated “a few of the bearish individuals level to the truth that provides are ample”.
“On the flip aspect of that, different merchants have a look at the long-term outlook and need to remind {the marketplace} that, if we do get a protracted … chilly winter … provides may not look as plentiful as they’re proper now,” he continued.
To contact the creator, e-mail andreas.exarheas@rigzone.com
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