US natgas futures fall 6% as West Virginia pipe returns, Northeast spot drops to multi-year lows
UNG•U.S. natural gas futures for October fell 6.1% to settle at $3 per million British thermal units as the Mountaineer XPress pipeline returned to service. Northeast next-day spot prices fell below $1 per mmBtu, while forecasts put U.S. gas storage 2.4% above its five-year average.
1. Futures and spot prices
October natural gas futures fell 19.6 cents, or 6.1%, to settle at $3 per mmBtu on Monday, their biggest daily percentage decline since early July. November futures fell about 4% to $3.11. Next-day prices dropped below $1 per mmBtu in New York, New England and the Mid-Atlantic, with demand expected to decline after a nor’easter hit the region.
2. Pipeline and storage
TC Energy’s Columbia Gas Transmission unit lifted the force majeure on its Mountaineer XPress pipeline in West Virginia on Sunday, after a mechanical issue had affected about 1.4 to 1.8 billion cubic feet per day of flows. The return is expected to allow more gas to flow from the Marcellus and Utica region in coming days. Analysts estimated storage at 3,416 billion cubic feet for the week ended September 25, 2.4% above the five-year average, ahead of Thursday’s federal inventory report.
3. Demand outlook
Average U.S. Lower 48 gas output was 112.3 billion cubic feet per day so far in September, tying August’s monthly record, though daily output was expected to drop to 107.5 bcfd on Monday. Forecasts put average demand, including exports, at 103.1 bcfd this week and 105.3 bcfd next week. Gas flows to the nine major U.S. LNG export plants averaged 18.0 bcfd so far in September, up from 17.3 bcfd in August.
