Natural Gas End of Day Summary: Henry Hub Up Slightly

US Henry Hub front month is trading slightly higher on the day, although has relinquished some earlier gains, as Middle East tensions, and higher LNG demand keep it supported.

• US Natgas NOV 23 up 0.1% at 3.38$/mmbtu
• US Natgas APR 24 up 0.9% at 3.26$/mmbtu
• Tensions in the Middle East are likely weighing on Egypt’s LNG exports plans. Egypt’s plans to resume LNG exports this month are uncertain, after the halt to Chevron’s Tamar field in Israel led to a 20% drop in gas flows to the country. Chevron has been instructed by Israel’s Ministry of Energy on Monday to shut down the production of the 10bcm/yr (27mcm/d) Tamar gas field for safety reasons amid the ongoing conflict.
• Australian Strikes: Chevrons and the unions are meeting for mediation talks on Wednesday morning with the industrial arbitrator to avoid the restart of industrial action at the Gorgon and Wheatstone LNG sites. The Offshore Alliance announced on Monday workers at the sites will restart industrial action on 19 October. At least one Japanese buyer has been informed that LNG supplies from the Gorgon and Wheatstone LNG facilities will not be affected by the restart of industrial action.
• Feedgas intake into US LNG terminals has risen on the day to 4.856 bcf/d. Although below the 5.069 bcf/d registered Oct. 8, it remains the second highest daily intake since late April.
• Domestic natural gas demand is holding above normal at 69.1bcf/d today according to Bloomberg with a mixed two-week weather forecast. Below normal temperatures are expected in central and eastern areas in the 6-10 day period before warmer weather starts to spread in from the west into the second week of the outlook.
• US domestic natural gas production was up to the highest since early September at 102.3bcf/d yesterday according to Bloomberg with output gradually recovering from slightly lower levels in recent weeks.
• Chevron has stopped natural gas exports via an offshore pipeline between Israel and Egypt and is using the alternative pipeline via Jordan, according to Reuters citing government sources.
• The Balticconnector gas pipeline leak probe proceedings on the premise of sabotage. The operator of the pipeline confirmed initial suspicions that a leak had occurred, which shut off the interconnector on Sunday early morning, Kalle Kilk, CEO of Estonian network operator Elering.
• Estonian Energy company Eesti Gaas does not expect any risks to gas supply following the shutdown of the Balticconnector pipeline, according to a company email reported by Bloomberg.
• The total estimated quantity of LNG on tankers that have not unloaded for at least 20 days increased by 14% over the last week to 4.48mn tons as of 8 October, according to Bloomberg estimates.
• Global weekly LNG imports totalled 7.4mn tons during 2-8 October, up by 9% on the week, driven by higher flows to Northwest Europe and Italy that rose to the highest since August according to BNEF.
• China’s average buying cost for spot and long-term LNG cargoes is expected to rise until December, but levels are expected to remain below last year, ENN Energy said in a research note.
• Global LNG prices remain in a pre-winter trough, but signs indicate the typical winter spike is approaching, according to Reuters.