Natural Gas End of Day Summary: Henry Hub Extends Declines

Henry Hub extended its losses following EIA data showing above expectation inventory levels. A dip in LNG export flows and warmer weather in the Eastern states has also added downside.

• US Natgas NOV 23 down -3.4% at 2.95$/mmbtu
• US Natgas APR 24 down -2.8% at 3.05$/mmbtu
• US domestic natural gas production was yesterday down at 103.0bcf/d from the start of week high according to Bloomberg but still above levels around 99.5bcf/d from this time last year.
• Natural gas deliveries to US LNG export facilities have dipped slightly to 14.1bcf/d today according to Bloomberg with decline it supplies to Sabine Pass although still high compared to flows below 13bcf/d earlier this month.
• Lower 48 dry gas demand is relatively unchanged on the day at 67.6bcf/d today according to Bloomberg with a mixed weather forecast for the coming two weeks.
• LNG - Customers of the proposed Lake Charles LNG export terminal are urging the US DOE to issue a new export license soon to enable a final investment decision according to S&P Global.
• The US Federal Energy Regulatory Commission has approved the expansion of the Gas Transmission Northwest pipeline, despite the protest of environmental groups.
• Finland determined that an external party was involved in the breach of the Balticconnector gas pipeline and the two data cables, Finland’s President Sauli Niinisto said.
• Gazprom and CNPC signed an agreement of extra gas supplies through 2023 according to Bloomberg.
• Asian demand for LNG has been subdued as the market approaches winter, as high JKM prices and forecasts for above average temperatures keep a lid on buying. This is likely to put some downward pressure on prices in the near term.
• BP shipped the first LNG cargo from the Tangguh Train 3 gas facility in Indonesia, which was initially scheduled to start commissioning in 2020, operator SKK Migas said in a statement.
• Shell bought two December DES China spot LNG cargoes via the Platts Market on Close window, according to Bloomberg’ sources.
• Strength in natural gas prices may result in an increase of fuel oil consumption as a substitute, particularly in Asia and Europe according to FGE earlier this week.
• Japan’s LNG imports from Russia during the first six months of the current financial year have fallen 21% year-on-year, according to TASS.
• Russia is scheduled to start commissioning of the first train of the Arctic 2 LNG facility by late-2023 and the first cargoes will be shipped early next year according to Deputy PM Alexander Novak.
• Germany’s SEFE, formerly part of Gazprom, continues to trade Russian LNG as the cost of cancelling the contracts could exceed 10 billion euros, according to Bloomberg.