North American natural gas prices continued their decline this week as markets braced for a possible economic slowdown after Hurricane Ian hit Florida.
The October Nymex natural gas futures contract climbed 21.7 cents on Wednesday, ending the month as early as the end of the month and expiring at $6.868/MMBtu. On Thursday, November took over as the prompt month, with futures prices dropping 8.1 cents to $6.874.
About 2.5 million Floridians remained without power on Thursday after the hurricane swept through the Sunshine State. A “catastrophic outage” could lead to downward pressure on Nymex natural gas futures contracts in November, according to EBW Analytics Group analyst Eli Rubin. US natural gas storage print Lower 48 production remained at a high level of around 100 Bcf/d, weighing on prices.
NatGasWeather said that “the balance between supply and demand is much looser than it was a few weeks ago” and that “at least the next two weeks should see at least two stable storage builds”. This would bode well for the bearish outlook.
But the energy war stay hot in europe, causing deep uncertainty as the continent heads into winter. Earlier this week, he found four leaks in the closed Nord Stream (NS) subsea natural gas pipeline. on thursday North Atlantic Treaty Organization (NATO) officials Pointed out signs of sabotage.
Emily McClain, vice president of Rystad Energy, said European gas prices “look like leaves blowing in the wind, with little indication of how far and in what direction they will be carried.”
Waha still in focus
The West Texas Waja Benchmark, an important natural gas pricing hub in Mexico, big discount This week at Henry Hub, sometimes as much as $4.00. East Daley Capital expects outflows in the Permian Basin to tighten by the second half of 2022, but “heavily discounted prices in Waha suggest that takeovers are already tight.”
Analysts suggest Permian prices have been impacted by declining southbound exports to Mexico. After hitting a record of nearly 1.5 Bcf/d this summer, West Texas Pipeline total exports recently dropped her 0.3 Bcf/d as Mexico exited its peak summer season.
[Mexico Matters: Cross-border energy trade between the U.S. and Mexico reached $42 billion last year. Understand this burgeoning trade flow — the projects, politics and natural gas prices — with NGI’s Mexico Gas Price Index. Know more.]
Mexico too Increased domestic productionNatural gas production averaged 4.06 Bcf/d in August, up from 3.81 Bcf/d in August 2021. The top gas-producing gas fields were in the southeast of the country, Kueski (477 MMcf/d) and Iksachi (304 MMcf/d). d), Malouve (303 MMcf/day), Akar (253 MMcf/day), Onell (190 MMcf/day).
The company said dry gas production from its Petróleos Mexicanos (Pemex) processing center averaged 2.29 Bcf/d, up from 2.15 Bcf/d in August 2021.
President Andrés Manuel Lopez Obrador said this week, LNG export hub The port of Coatzacoalcos, Veracruz, could help Europe pull away from Russian gas. Gas will most likely come from the United States, which supplied 87% of Mexico’s total consumption as of May.
Meanwhile, economic concerns overwhelm the market in Mexico. Despite recession fears, the Bank of Mexico followed in the footsteps of the US Federal Reserve by raising interest rates by 75 basis points on Thursday to a record high of 9.25%. Mexico’s annual inflation rate reached 8.76% in the first half of September.
Mexico’s Sistrangas demand rose to 4.545 Bcf on Tuesday (27 Sept) from 4.462 Bcf the day before. Mexican gas production fed into the system was 1.279 Bcf. The Southeast dominated production, with 714 MMcf from this region injected into the pipeline system.
The power sector was the largest user of natural gas in Sistrangas on Tuesday at 1.382 Bcf. This was followed by the distribution segment (1.145 Bcf) and Pemex (1.090 Bcf).
Consultancy Gadex calculated imports of natural gas pipelines from the US to Sistrangas at 3.266 Bcf on Tuesday. The Sur de Texas pipeline injected 604 MMcf into the system. Liquefied natural gas imports to Sistrangas amounted to 23 MMcf.
Mexican cash price
In Mexico, cash prices for NGI natural gas plummeted week by week, falling by more than $1 at most points. on wednesday, Ross Ramones It was $5.851, down 16.3 cents per day. Monterrey Via the Mier-Monterrey system, it fell 16.2 cents to $7.639.
Tuspan In Veracruz via Cenagas, the spot price fell 16.2 cents to $6.378.
in the west, Guadalajara The price rose 30.8 cents to $5.806. Further north in El Encino, prices via Tarahumara were $4.629, up 77.6 cents from the previous day.In the Yucatan Peninsula, cash prices Merida Wednesday was down 16.0 cents to $7.087.
US gas storage
On Thursday, the US Energy Information Administration (EIA) reported the injection of 103 Bcf into natural gas storage stocks for the week ending Sept. 23. This coincided with last week’s printing and exceeded expectations.
Stocks increased by 23 Bcf in the Mid-South region, according to EIA. This includes an injection of 18 Bcf into non-salt facilities and an increase of 5 Bcf into salt. Until Mexico develops storage capacity, this is the most readily available storage system in Mexico.
In the week to 23 September, total working gas volume in the Mid-South region was 958 Bcf, down from 1,010 Bcf for the same period a year ago. The figure was 94 Bcf lower than the 1,052 Bcf average storage on the same day from 2018 to 2022, according to the EIA.