US natgas prices up 2% on forecasts for more demand as heat wave lingers (updated)
28/07/2023 19:47
(Adds latest prices)
July 28 (Reuters) - U.S. natural gas futures gained about 2% on Friday on forecasts for more demand over the next two weeks
than previously expected with the weather projected to remain hotter than normal through at least mid-August.
Meteorologists forecast Friday will be the hottest day of the summer so far in the U.S. Lower 48 states and the second hottest on
record, according to Refinitiv data going back to 2018. Data provider Refinitiv forecast temperatures across the Lower 48 states would
average 82.8 degrees Fahrenheit (28.8 Celsius) on Friday, just shy of the 83.0 F record set on July 20, 2022.
Extreme heat already this week has stressed electric grids and boosted some spot power prices to their highest in months as homes
and businesses crank up their air conditioners to escape the brutal heat wave blanketing much of the country.
Grid operators across the nation declared hot weather alerts this week and told energy companies to put off unnecessary
maintenance so all available generating plants and power lines would be ready for service. Despite the extreme heat, however, no grid
operator has forecast power use would break all-time highs this week.
In Texas, however, the Electric Reliability Council of Texas, the state's grid operator, forecast demand would to set new records
next week on Monday, Tuesday, Wednesday and Friday as the heat wave lingers.
U.S. power generators will likely burn a record amount of gas to produce electricity for a second day in a row on Friday.
Refinitiv forecast power generators would burn about 52.9 billion cubic feet per day (bcfd) of gas on Friday, which would top the
current record of 52.3 bcfd on Thursday and recent highs of 50.3 bcfd on July 14 and 49.6 bcfd on July 20, 2022.
The U.S. Energy Information Administration (EIA), which uses a different data set, has said the 2022 record was set on July 21.
On its first day as the front-month, gas futures NGc1 for September delivery on the New York Mercantile Exchange rose 4.3 cents,
or 1.7%, from where the September contract closed on Thursday to settle at $2.638 per million British thermal units.
That, however, was up about 6% from where the August contract closed when it was still the front-month on Thursday.
For the week, the contract was down about 3% after gaining about 7% last week.
In the spot market, next-day power for Friday soared to $158 per megawatt hour in SP-15 EL-PK-SP15-SNL in Southern California,
its highest since January, and $113 at the Massachusetts hub EL-PK-NPMS-SNL in New England, its highest since February.
SUPPLY AND DEMAND
Refinitiv said average gas output in the Lower 48 states rose to 101.5 bcfd so far in July, up from 101.0 bcfd in June. That
compares with a monthly record of 101.8 bcfd in May.
On a daily basis, however, output was on track to drop about 1.9 bcfd to a preliminary one-month low of 99.7 bcfd on Friday due
mostly to declines in Pennsylvania, Ohio, West Virginia and Colorado. Analysts have noted that preliminary data is often revised later
in the day.
Meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Aug. 12.
Refinitiv forecast U.S. gas demand, including exports, would rise from 105.4 bcfd this week to 106.5 bcfd next week before easing
to 106.2 bcfd as the weather starts to become seasonally less hot. The forecasts for this week and next were higher than Refinitiv's
outlook on Thursday.
Gas flows to the seven big U.S. LNG export plants rose to an average of 12.7 bcfd so far in July from 11.6 bcfd in June. That is
still well below the monthly record of 14.0 bcfd in April due to ongoing maintenance at several facilities.
Week ended Week ended Year ago Five-year
Jul 28 Jul 21 Jul 28 average
Forecast Actual Jul 28
U.S. weekly natgas storage change (bcf): 24 16 37 37
U.S. total natgas in storage (bcf): 3,011 2,987 2,451 2,679
U.S. total storage versus 5-year average 12.4% 13.1%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2022 (2017-2021)
Henry Hub NGc1 2.58 2.60 7.19 6.54 2.89
Title Transfer Facility (TTF) TRNLTTFMc1 8.36 9.20 51.76 40.50 7.49
Japan Korea Marker (JKM) JKMc1 10.97 11.10 39.36 34.11 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 2 3 1 2 3
U.S. GFS CDDs 240 239 245 211 201
U.S. GFS TDDs 242 242 246 213 204
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 101.2 101.3 100.9 98.0 90.5
U.S. Imports from Canada 7.4 7.6 7.6 9.1 8.2
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 108.6 108.9 108.6 107.1 98.8
U.S. Demand (bcfd)
U.S. Exports to Canada 1.7 1.6 1.6 2.5 2.4
U.S. Exports to Mexico 6.6 6.6 6.7 5.7 5.5
U.S. LNG Exports 12.7 12.6 13.0 10.6 6.1
U.S. Commercial 4.3 4.4 4.4 4.4 4.5
U.S. Residential 3.5 3.5 3.5 3.5 3.6
U.S. Power Plant 48.0 47.9 48.5 43.7 41.7
U.S. Industrial 21.3 21.3 21.4 21.3 21.1
U.S. Plant Fuel 5.0 5.0 5.0 5.0 5.0
U.S. Pipe Distribution 2.2 2.2 2.3 2.3 2.2
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 84.6 84.5 85.2 80.3 78.2
Total U.S. Demand 105.6 105.4 106.5 99.1 92.2
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2022 2021 2020
% of Normal % of Normal % of Normal % of Normal % of Normal
Forecast Forecast Actual Actual Actual
Apr-Sep 83 83 107 81 103
Jan-Jul 77 77 102 79 98
Oct-Sep 75 75 103 81 95
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Jul 28 Jul 21 Jul 14 Jul 7 Jun 30
Wind 7 7 7 6 10
Solar 4 4 4 4 4
Hydro 6 6 6 6 6
Other 2 2 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 45 46 45 45 43
Coal 20 19 19 19 18
Nuclear 17 17 17 18 17
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 2.47 2.60
Transco Z6 New York NG-CG-NY-SNL 1.98 2.09
PG&E Citygate NG-CG-PGE-SNL 5.47 5.32
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.35 1.47
Chicago Citygate NG-CG-CH-SNL 2.41 2.46
Algonquin Citygate NG-CG-BS-SNL 3.75 6.30
SoCal Citygate NG-SCL-CGT-SNL 9.75 12.55
Waha Hub NG-WAH-WTX-SNL 2.17 2.32
AECO NG-ASH-ALB-SNL 1.72 1.75
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 112.75 98.75
PJM West EL-PK-PJMW-SNL 122.00 142.75
Ercot North EL-PK-ERTN-SNL 53.75 56.00
Mid C EL-PK-MIDC-SNL 108.70 89.00
Palo Verde EL-PK-PLVD-SNL 189.00 231.00
SP-15 EL-PK-SP15-SNL 157.75 76.00
(Reporting by Scott DiSavino; editing by Jonathan Oatis, Kirsten Donovan)
((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=usages
For Interactive Map, type 'Interactive Map' in the box at upper left of the Reuters nEiko 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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