US NATGAS: Henry Hub Midday Update

Henry Hub front month recovers morning losses after storage report beat expectations at +87 bcf, offset by record LNG feedgas demand

• Nov 25 is trading at $3.453, up 0.09% on the day.
• Dec 25 is trading at $4.098, up 0.94% on the day.
• Intraday front month volume on NYMEX is about 102,000 lots.
• Henry Hub futures are holding on to the bulk of their recent gains. A broader downtrend is intact and short-term gains are considered corrective. However, the rally has exposed key resistance at $3.585, the Oct 2 high, and a trendline resistance at $3.565, drawn from the Mar 10 high.
• Forecasts shifted cooler in the southern and eastern US for Oct. 28-Nov. 1 but warmer elsewhere: Atmospheric G2.
• Forecasts turned cooler over the eastern half of the US and warmer over the western region for Nov. 2-6.
• The EIA weekly gas inventories for the week ending Oct. 17 showed a build of 87 bcf, above the +77 five-year average and the +79 build from last year.
• Total stocks are up to 3,808 bcf, 34 above last year and 164 above the 5-yr avg of 3,644 bcf.
• The storage report was underestimated by Reuters by 6 (+81), underestimated by WSJ by 6 (+81), underestimated by BBG by 4 (+83), underestimated by NGI by 4 (+83).
• MNI US feedgas volumes show day-ahead nominations at 17.29 bcf/d after the return of Freeport yesterday, which suffered an outage on one of its trains. Its intake recovered to 1.92 bcf/d from 1.18 bcf/d from yesterday.
• The NHC reported that Tropical Storm Melissa will become a major hurricane by late this weekend or early next week, though is moving slowly. The hurricane will not track toward the US coast.
• BNEF estimates lower 48 dry gas production at 107.95 Bcf/d, down from the previous day of 108.16 Bcf/d.
• U.S. dry gas consumption is estimated at 75.56 Bcf/d, up from the previous day of 74.35 Bcf/d.

Pipeline exports to Mexico were estimated at 6.96 Bcf/d, down from the previous day of 7.13 Bcf/d.