The Henry Hub spot price increased for the second straight trading session as there was a bullish sentiment in the region from decreased offshore production and increased LNG feedgas demand.
The cash price for Henry Hub increased 5.5 cents on the day to $2.315/MMBtu Oct. 12. This was the highest level this location has reached since the beginning of September.
Offshore production was shut-in late last week as crews made preparation for Hurricane Delta. Production is likely to start up this week with no storms building in the Gulf, but remained at 281 MMcf as of Oct. 12, according to S&P Global Platts Analytics. Current production levels are nearly 1 Bcf lower than what production has averaged so far this month.
LNG feedgas demand increased 1 Bcf on the day to 7.04 Bcf, according to Platts Analytics. This was the highest level LNG feedgas demand has reached in the last six days.
Specifically, LNG feedgas demand at the Cameron facility increased 150 MMcf on the day to 600 MMcf, according to Platts Analytics. Flows to the facility were temporarily at zero MMcf/d late last week as the facility prepared for Hurricane Delta.
The storm made landfall east of Cameron, leaving Sabine Pass out of the main path of the storm. LNG feedgas demand at Sabine Pass increased 864 MMcf on the day to 2.48 Bcf, according to Platts Analytics. This was the highest level it has reached in the last four days.
Counteracting the bullish sentiment, Calcasieu Parish still has about 21,000 customers without power following the arrival of Hurricane Delta. Entergy is still working on assessing the total damage and has not released a timeline for a return to service for the whole area.
Power prices have fluctuated greatly in the region and have brought a level of uncertainty to the market. Into GTC for Oct. 12 delivery traded upward of $33/MWh. But as the weekend passed, power prices trended back, with Into GTC for Oct. 13 delivery trading near $28/MWh.
