US Downward Pressure from Above Expected Storage and Low Mexico Flows

US Natgas easing lower on reduced pipeline flows to Mexico and higher EIA storage injections than expected as Freeport LNG is expected to return in Oct at near full capacity.

• US Natgas SEP 22 down -1.2% at 8.03$/mmbtu
• Flows to Mexico via pipeline have fallen to the lowest this year, today at 5.6bcf, after a mechanical failure resulted in a force majeure at the Valley Crossing Pipeline.
• Freeport LNG has been offline since June 8 but has received regulatory approval to reopen in October. Restart was expected to occur gradually, but the return looks likely to be 2bcf just below full capacity. Deliveries to LNG export terminal are today stable at 11.25bcf.
• Dry gas production continues at high levels of 96.3bcf although down from the peak seen last weekend of 98.7bcf.
• Dry gas demand is still well above normal at 74.4bcf due to ongoing hot temperature forecasts.