U.S. natgas futures jump 5% to 5-week high on hotter forecasts (updated)
22/07/2022 14:35
(Adds latest prices, quote)
July 22 (Reuters) - U.S. natural gas futures jumped about 5% to a five-week high on Friday on forecasts
for hotter weather and higher demand next week than previously expected and ongoing problems with a turbine
needed to boost output on the Russia-Germany Nord Stream gas pipe.
That puts the contract on track to gain about 53% in July, which would be its biggest monthly percentage
gain since hitting a record 63% in September 2009.
Extreme heat has already caused U.S. power demand to hit several all-time highs this summer in many
states, including Texas, as homes and businesses crank up their air conditioners to escape the heat.
urn:newsml:reuters.com:*:nL1N2Z111K
Electric companies were burning lots of gas to produce all that power in part because coal prices
CQNYMC1 were near record highs, making it uneconomic for many generators to switch to coal-fired plants.
The gas price increase came despite an increase in output to near record levels and the ongoing outage at
the Freeport liquefied natural gas (LNG) export plant in Texas, which has left more gas in the United States
for utilities to inject into low stockpiles. EIA/GAS NGAS/POLL
Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day
(bcfd) of gas before it shut on June 8. Freeport LNG estimated the facility will return to partial service in
October. Some analysts expect the outage to last longer. urn:newsml:reuters.com:*:nL1N2Z01UN urn:newsml:reuters.com:*:nL1N2YU1QW urn:newsml:reuters.com:*:nL1N2Z224T
"Despite a few days of recent production being higher than ever recorded, it appears that these power
demand surges have largely offset the additional supply, resulting in below average storage injections and
storage expectations which have contributed heavily to the recent ... run-ups," analysts at Gelber &
Associates said in a note.
Front-month gas futures NGc1 rose 36.7 cents, or 4.6%, to settle at $8.299 per million British thermal
units (mmBtu), putting the contract on track for its highest close since June 13.
For the week, the contract climbed for a third week in a row, gaining 18% in its biggest weekly percentage
gain since August 2020.
So far this year, the gas front-month is up 123% as much higher prices in Europe and Asia keep demand for
U.S. LNG exports strong, especially since Russia's invasion of Ukraine.
Gas was trading around $49 per mmBtu in Europe TRNLTTFMc1 and $39 in Asia JKMc1 .
Russian gas exports on the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal
(Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route jumped to 3.7
bcfd on Thursday from around 1.4 bcfd over the past 10 days while Nord Stream was shut for maintenance.
That was the same as the 3.7-bcfd average during the month before Nord Stream shut but was still much
lower than the 9.4 bcfd average in July 2021. NG/EU urn:newsml:reuters.com:*:nL1N2Z2080 urn:newsml:reuters.com:*:nL8N2Z12JM urn:newsml:reuters.com:*:nL1N2Z01KT urn:newsml:reuters.com:*:nS8N2XR00O
Gas flows on Nord Stream, however, may not rise much in the near future because a turbine Russia said was
needed to boost output is stuck in transit in Germany because Moscow so far has not given the go-ahead to
transport it back. urn:newsml:reuters.com:*:nL8N2Z2644 urn:newsml:reuters.com:*:nL1N2Z3194
TOP PRODUCER
U.S. gas futures lag far behind global prices because the United States is the world's top producer, with
all the fuel it needs for domestic use, while capacity constraints limit LNG exports.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 96.1 bcfd so far
in July from 95.3 bcfd in June. That compares with a monthly record high of 96.1 bcfd in December 2021.
Refinitiv projected average U.S. gas demand including exports would slide from 101.1 bcfd this week to
100.6 bcfd next week and 99.9 bcfd in two weeks as extreme heat starts to ease in some parts of the country.
The forecast for next week was higher than Refinitiv's outlook on Thursday.
The average amount of gas flowing to U.S. LNG export plants eased to 11.0 bcfd so far in July from 11.2
bcfd in June due to reductions at Cheniere Energy Inc's LNG.A Sabine Pass and Venture Global LNG's Calcasieu
Pass plants in Louisiana this week.
Week ended Week ended Year ago Five-year
Jul 22 Jul 15 Jul 22 average
(Forecast) (Actual) Jul 22
U.S. weekly natgas storage change (bcf): +30 +32 +38 +32
U.S. total natgas in storage (bcf): 2,431 2,401 2,709 2,761
U.S. total storage versus 5-year average -12.0% -12.0%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2021 (2017-2021)
Henry Hub NGc1 7.81 7.93 3.82 3.73 2.89
Title Transfer Facility (TTF) TRNLTTFMc1 48.85 45.71 12.49 16.04 7.49
Japan Korea Marker (JKM) JKMc1 38.10 38.17 13.77 18.00 8.95
Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year
Norm Norm
U.S. GFS HDDs 3 3 2 3 3
U.S. GFS CDDs 257 253 211 213 204
U.S. GFS TDDs 260 256 213 216 207
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Week Next Week This Week Five-Year
Last Year Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 95.9 96.3 96.2 92.8 85.6
U.S. Imports from Canada 7.9 8.1 8.3 7.8 8.1
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 103.8 104.4 104.5 100.6 93.8
U.S. Demand (bcfd)
U.S. Exports to Canada 2.0 2.2 2.2 2.2 2.3
U.S. Exports to Mexico 6.3 6.2 6.2 6.7 5.2
U.S. LNG Exports 11.1 10.8 10.6 10.4 4.5
U.S. Commercial 4.3 4.4 4.4 4.4 4.4
U.S. Residential 3.5 3.5 3.6 3.6 3.6
U.S. Power Plant 43.7 45.7 45.3 38.9 39.6
U.S. Industrial 21.3 21.3 21.3 20.6 20.8
U.S. Plant Fuel 4.7 4.8 4.8 4.8 4.7
U.S. Pipe Distribution 2.1 2.2 2.2 2.2 2.0
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 79.7 82.0 81.6 74.6 75.2
Total U.S. Demand 99.2 101.1 100.6 93.9 87.2
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Jul 22 Jul 15 Jul 8 Jul 1 Jun 24
Wind
Solar
Hydro
Other
Petroleum
Natural Gas
Coal
Nuclear
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 7.99 7.58
Transco Z6 New York NG-CG-NY-SNL 9.46 8.06
PG&E Citygate NG-CG-PGE-SNL 8.89 8.60
Dominion South NG-PCN-APP-SNL 7.47 6.86
Chicago Citygate NG-CG-CH-SNL 7.75 7.42
Algonquin Citygate NG-CG-BS-SNL 23.50 29.35
SoCal Citygate NG-SCL-CGT-SNL 8.71 8.76
Waha Hub NG-WAH-WTX-SNL 7.53 7.17
AECO NG-ASH-ALB-SNL 4.26 4.06
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day
New England EL-PK-NPMS-SNL 240.50 257.50
PJM West EL-PK-PJMW-SNL 156.50 157.00
Ercot North EL-PK-ERTN-SNL 118.00 105.00
Mid C EL-PK-MIDC-SNL 59.33 68.25
Palo Verde EL-PK-PLVD-SNL 108.00 110.25
SP-15 EL-PK-SP15-SNL 92.75 100.00
(Reporting by Scott DiSavino; Editing by Paul Simao, Kirsten Donovan and Nick Zieminski)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging:
scott.disavino.thomsonreuters.com@reuters.net))
((For Refinitiv type ENERGY in Eikon search bar and then go to the GAS drop down and the NORTH AMERICA drop down or see: cpurl://apps.cp./cms/?pageid=usa-gas
For Interactive Map, type 'Interactive Map' in the box at upper left of the Reuters Eikon terminal.
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SNL U.S. gas prices, see: 0#SNL-NG
For next-day SNL U.S. power prices, see: 0#SNL-PWR
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/
For U.S. Northwest hydro power report, see: NWRFC
For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
For the U.S. natural gas speed guide, see: USGAS
For the U.S. power speed guide, see: USPOWER
To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET ) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)
NYMEX Henry Hub options and futures combined 0#3CFTC023651
NYMEX Henry Hub futures only 0#1CFTC023651
ICE Henry Hub options and futures combined 0#3CFTC023391
NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B
NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C ))
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