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First Look - Gas heads for a weekly decline after inventories rose more than expected last week

Oil is trading higher but heading for a weekly loss
- Weak economic data from both the US and China has weighed on prices this week, pressuring crude prices lower despite continued geopolitical tensions in the Middle East
OPEC must make supply decision soon (Reuters)
- In the next few weeks, OPEC must decide whether to proceed with its plan to begin returning supply to the market or to postpone the plan
- OPEC ministers have said that planned production increases could be “paused or reversed based on market conditions”
- Demand in China has been weak, which could make it difficult to return supply without weakening the market, but if the plan is delayed, OPEC risks losing more market share to non-OPEC producers
Enbridge cuts tolling rates on Canadian pipelines (PGJ)
- To compete with the new Transmountain pipeline expansion, Enbridge has lowered rates from $10.70 to $9.49/Bbl for shipments from Alberta to Texas
- The commencement of TMX has led to a significant drop in apportionment on Enbridge’s Mainline system, from over 20% in March to zero in September
- For several years, Canadian producers faced pipeline egress shortages, which weighed on differential prices

Gas heads for a weekly decline after inventories rose more than expected last week
- Prompt gas was 3.2c lower to $2.021/MMBtu (As of 8:49 AM)
- Winter ‘24/’25 strip is down 3.6c to $3.051, and the Summer ’25 strip is down 3.2c to $3.090
- Today's European Ensemble remained consistent, forecasting warmer temperatures next week followed by a cooler start to September, despite a 2.6-F drop in average Lower 48 temps today, with all regions except the Southeast cooling (Criterion)
Supercharged September suggests up to 10 named Atlantic storms, raising downside risk (NGI
- AccuWeather forecasts six to 10 named storms in Sept. as a shift in weather patterns, along with near-record sea temperatures, is expected to trigger a surge in Atlantic tropical activity
- The end of August will see the clearing of Saharan dust, further boosting conditions for storm development, with AccuWeather warning of a possible "parade of storms" in the coming weeks
- The potential for increased storm activity poses bearish risks for natural gas prices, which are already under pressure due to high supply and low demand
- Previous storms, like Hurricane Beryl, have led to significant disruptions, with Freeport LNG losing 2 Bcf/d of demand after a prolonged shutdown; additional storms could exacerbate containment risks as gas storage approaches 4 Tcf