Nat-Gas Prices Plummet on Pipeline Recovery and Normal Weather
Nat-gas prices plummeted on Tuesday for the second consecutive day as production rebounded to near-normal levels following repairs to a ruptured pipeline in West Virginia. TC Energy lifted the force majeure on the Mountaineer Xpress, part of the Columbia Gas Transmission system, after completing the necessary fixes.
The recovery in production and reduced supply fears weighed heavily on prices, which closed down 3.06% at $-0.095 per November Nymex natural gas contract (NGX26). Additionally, forecasts for seasonal US weather shifted towards more normal temperatures across the eastern and southern US from October 4-13, limiting demand for heating or air conditioning.
US dry gas production on Tuesday reached 110.8 bcf/day (+1.0% y/y), while lower-48 state gas demand was 70.6 bcf/day (-1.6% y/y). Estimated LNG net flows to US LNG export terminals on Tuesday were 18.8 bcf/day (+1.1% w/w).
The market's expectation of a 'Super El Niño' bringing warmer-than-normal temperatures to the Northern Hemisphere this fall and winter remains a bearish medium-term factor for nat-gas prices, which could reduce heating demand.