Natural Gas End of Day Summary: Prices Surge on Smaller Stock Build

US Henry Hub front month has been surging during US hours, approaching its highest closing level since Oct. 13, as the below expected build in US natural gas storage inventories and falling temperatures boost prices.

• US Natgas NOV 23 up 6.2% at 3.2$/mmbtu
• US Natgas APR 24 up 1.6% at 3.14$/mmbtu
• The latest EIA weekly gas inventories for the week ending 13 October showed a build of +74bc, compared to a Bloomberg survey expecting +80.27bcf and the five-year average for time of year of +66bcf.
• The total US inventories remain above normal at 3,700bcf as of 20 October, compared with the five-year normal at 3,517bcf.
• The latest weather forecast is showing falling temperatures. Below average levels are expected for the central and Eastern USA in the next 6-10 days, before returning to near normal in the next 8-14 days.
• US natural gas demand is estimated lower today below the five-year range to 65.86bcf/d, from 66.17bcf/d yesterday. T
• Feedgas deliveries to US LNG export facilities rose on the day to 13.79bcf/, compared with 13.67bcf/d yesterday. Deliveries are above the 30-day moving average of 13.39bcf/d. Flows to Freepoint rose back 2.05bcf/d compared with the 30-day moving average of 1.83bcf/d according to Bloomberg.
• North Asian physical spot LNG physical prices are around the $18/MMBtu mark, according to Bloomberg, as geopolitical tensions from the Middle East add a risk premium. This is despite a flurry of offers in the region for December deliveries.
• The European natural gas market is tight, and any incident could cause a price rise, Total CEO Patrick Pouyanne said at a teleconference reported by TASS.
• Azerbaijan needs buyers to commit to at least ten years in order to increase natural gas exports to Europe, Socar VP Elshad Nasirov said, cited by Interfax.
• Israel may face difficulties to meet its natural gas export obligations in full due to the closure of the 10bcm/yr Tamar gas field and the EMG pipeline, even if output from the Karish field will be increased according to Argus Media.
• Egypt’s LNG exports could be restricted this winter, tightening supply availability in Europe, according to IEA Gas Analyst Greg Molnar via LinkedIn.
• LNG flows to Northwest Europe were in line with the day before at 252.87mcm/d on 24 October, up by 52% from the 30-day moving average.
• Finland’s Inkoo LNG terminal will open revised winter booking slots on Friday to ensure stable supplies after the shutdown of the Balticconnector pipeline, Gasgrid said.
• Pakistan is planning to buy two LNG cargoes in January to meet increasing demand in the winter, Pakistan’s Energy Minister Muhammed Ali said, cited by Bloomberg.
• Eni signed an agreement with Indonesia’s Merakes LNG to buy 0.8bcm/yr of LNG starting from January, the firm said in a statement.