Last Week in Natural Gas
The front month came alive last week, with Henry Hub settling near $2.89 Friday for a gain of roughly 4%. The driver was mechanical, not fundamental: Gulf export-terminal maintenance near Freeport, worth about 2 Bcf/d, wound down and feedgas reconnected, pulling export demand back up just as a late-August heat dome across the South lifted power burn into the summer tail. Weekly injections kept printing below the five-year average, but that support is thinning — builds are set to cross back above normal by mid-September as cooling load fades. Storage still carries a surplus near 5% above the five-year norm, a cushion tracking toward a record by end-October that caps every rally. NOAA’s latest reading pegged the Oceanic Nino Index at +1.39, confirming a record-track Super El Nino and a warm-leaning winter bias that kept the December-January premium heavy but unconvincing. The Atlantic, suppressed all month, finally stirred late with multiple invests carrying Gulf-directed risk.
The Week Ahead
Thursday’s EIA release, covering the week ended August 28, is the week’s marquee catalyst. Consensus centers on another below-average injection, likely in the mid-20s to low-30s Bcf, against a five-year-average build near +37 Bcf — a sub-normal print that keeps the near-term balance tighter than the storage overhang suggests. The bigger swing factor is the tropics: the late-August Atlantic awakening leaves several invests with Gulf-directed potential, and any feedgas or production threat there is the one catalyst that can pull disruption premium into a front month that has spent the season ignoring it. Watch how the September roll’s aftermath settles the October shoulder, and watch power burn as the Southern heat breaks — the summer tail is the last real demand pillar before shoulder season. The curve is still stacking heavy November-to-January winter premium; spot strength says the prompt is firm, but the back of the strip keeps fading the heating bid rather than chasing it.
In Plain English
Natural gas prices firmed up last week, climbing about 4%, after export plants along the Gulf Coast returned from maintenance and a late-summer heat wave across the South pushed up demand for air-conditioning power. Even so, the country is sitting on more gas in storage than is normal for this time of year, which keeps a lid on how far prices can rise. Forecasters expect a milder-than-usual winter tied to a strong El Nino — a warming of the Pacific Ocean that tends to bring warmer US winters — and that is weighing on prices for the cold months ahead. Traders are also keeping an eye on the Gulf of Mexico, where the first storms of the season are finally brewing.