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Strong US Production Balanced Against Cooling Demand

NATGAS

US Natgas edges higher as weather forecast maintain the above normal temperatures for much of the US suggesting strong domestic demand.

  • US Natgas OCT 22 up 1.1% at 8.34$/mmbtu
  • Below normal temperatures are expected in the west in the 6-10 day forecast period but turn warmer in the second week as the rest of the country is expecting above normal. Lower 48 dry gas demand is currently back nearer normal levels at about 66.6bcf/d compared to the normal of 64bcf/d for this time of year.
  • Downward pressure on US prices comes from strong production levels with estimates showing a record of 101.1bcf/d yesterday. EIA US drilling report yesterday forecast shale gas production to increase again in October by 0.6bcf/d.
  • Gas exports are steady with deliveries to LNG export terminals at 11.1bcf/d and exports to Mexico at 6.8bcf/d.

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