U.S. natgas falls 6% to near 3-wk low on rising output, less cold (updated)
09/02/2022 19:32
(Adds latest prices)
Feb 9 (Reuters) - U.S. natural gas futures fell about 6% to a near three-week low on Wednesday as output
slowly increased after weeks of reductions from freezing wells and on forecasts for slightly less cold weather
and lower heating demand than expected in the next two weeks.
After weeks of near record volatility, front-month gas futures NGc1 for March delivery fell 24.7 cents,
or 5.8%, to $4.001 per million British thermal units at 2:10 p.m. EST (1910 GMT), putting the contract on
track for its lowest close since Jan. 20.
The American Public Power Association (APPA) industry trade group said it asked the U.S. Commodity Futures
Trading Commission (CFTC) to investigate natural gas trading activity on Jan. 27 when prices spiked by a
record 46%. urn:newsml:reuters.com:*:nL1N2UK25I
In the spot market, frigid weather and high heating demand in the U.S. Northeast have kept next-day power
and gas prices in New York NG-CG-NY-SNL and New England NG-CG-BS-SNL EL-PK-NPMS-SNL at or near their
highest levels since January 2018. urn:newsml:reuters.com:*:nL1N2TR0X4 urn:newsml:reuters.com:*:nL1N2TN1OX
Those high prices have made it economic for the region's power generators to burn lots of expensive oil
and liquefied natural gas (LNG) this winter.
Data provider Refinitiv said output in the U.S. Lower 48 states fell from a record 97.3 billion cubic feet
per day (bcfd) in December to 93.9 bcfd in January and 90.8 bcfd in February after wells in several producing
regions froze, including the Permian in Texas and New Mexico, the Bakken in North Dakota and the Appalachia in
Pennsylvania, West Virginia and Ohio. urn:newsml:reuters.com:*:nL1N2TJ23J
On a daily basis, however, output has been rising almost daily since it dropped to 86.3 bcfd during a
winter storm on Feb. 4, its lowest since February 2021.
With the weather turning seasonally less cold, Refinitiv projected average U.S. gas demand, including
exports, would drop from 130.0 bcfd this week to 122.6 bcfd next week. The forecast for this week was lower
than Refinitiv's outlook on Tuesday.
The amount of gas flowing to U.S. LNG export plants rose to an average of 12.5 bcfd so far in February,
which would top the monthly record of 12.4 bcfd in January, as liquefaction trains at Venture Global LNG's
Calcasieu Pass plant in Louisiana enter service. A vessel arrived near Calcasieu on Monday and could pick up
the plant's first LNG cargo this week. urn:newsml:reuters.com:*:nL1N2UI1T5
Traders said demand for U.S. LNG would remain strong so long as global gas prices keep trading well above
U.S. futures as utilities around the world scramble for cargoes to meet surging demand in Asia and replenish
low inventories in Europe - especially with the threat that Russia could invade Ukraine and cut gas supplies
to Europe. NG/GB urn:newsml:reuters.com:*:nL1N2UD16S urn:newsml:reuters.com:*:nL8N2RT64U urn:newsml:reuters.com:*:nL1N2U52QX
Russia provides 35%-40% of Europe's gas supplies, totaling about 16.3 bcfd in 2021, according to analysts
and U.S. energy data. urn:newsml:reuters.com:*:nL8N2RT64U urn:newsml:reuters.com:*:nL1N2U52QX
Gas futures traded around $25 per mmBtu in Europe TRNLTTFMc1 and Asia JKMc1 , compared with just $4 in
the United States. But no matter how high global prices rise, the United States only has capacity to turn
about 12.4 bcfd of gas into LNG. The rest of the gas flowing to LNG facilities is used to run plant equipment.
Week ended Week ended Year ago Five-year
Feb. Jan. 28 Feb. 4 average
4(Forecast) (Actual) Feb. 4
U.S. weekly natgas storage change (bcf): -226 -268 -174 -150
U.S. total natgas in storage (bcf): 2,097 2,323 2,542 2,316
U.S. total storage versus 5-year average -9.5% -5.8%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2021 (2017-2021)
Henry Hub NGc1 4.09 4.25 2.92 3.73 2.89
Title Transfer Facility (TTF) TRNLTTFMc1 25.35 25.30 6.14 16.04 7.49
Japan Korea Marker (JKM) JKMc1 25.31 25.10 7.36 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 392 395 556 403 396
U.S. GFS CDDs 3 3 5 6 5
U.S. GFS TDDs 395 398 561 409 401
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 93.1 90.5 91.2 87.8 83.3
U.S. Imports from Canada 9.3 9.4 9.1 9.2 8.9
U.S. LNG Imports 0.1 0.2 0.1 0.1 0.2
Total U.S. Supply 102.5 100.1 100.4 97.1 92.4
U.S. Demand (bcfd)
U.S. Exports to Canada 2.4 2.3 2.2 2.0 2.7
U.S. Exports to Mexico 5.8 5.4 5.7 6.0 4.8
U.S. LNG Exports 12.2 12.5 12.2 10.5 4.7
U.S. Commercial 19.4 17.9 17.3 20.5 15.6
U.S. Residential 33.2 30.1 28.3 34.7 26.1
U.S. Power Plant 28.6 28.4 24.3 30.3 26.3
U.S. Industrial 25.9 25.7 25.2 26.7 24.5
U.S. Plant Fuel 4.6 4.5 4.5 4.4 4.6
U.S. Pipe Distribution 3.1 2.9 2.7 2.9 3.1
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 114.9 109.7 102.5 119.6 100.3
Total U.S. Demand 135.3 130.0 122.6 138.1 112.5
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Feb 11 Feb 4 Jan 28 Jan 21 Jan 14
Wind 12 11 9 11 10
Solar 2 2 2 2 2
Hydro 7 6 7 7 7
Other 2 2 2 2 2
Petroleum 1 1 1 1 1
Natural Gas 33 33 35 33 34
Coal 25 25 26 25 24
Nuclear 18 19 19 19 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 4.30 4.44
Transco Z6 New York NG-CG-NY-SNL 4.50 4.90
PG&E Citygate NG-CG-PGE-SNL 4.70 4.81
Dominion South NG-PCN-APP-SNL 3.88 3.94
Chicago Citygate NG-CG-CH-SNL 4.07 4.11
Algonquin Citygate NG-CG-BS-SNL 9.32 13.36
SoCal Citygate NG-SCL-CGT-SNL 4.17 4.06
Waha Hub NG-WAH-WTX-SNL 3.76 3.90
AECO NG-ASH-ALB-SNL 3.40 3.47
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day
New England EL-PK-NPMS-SNL 104.75 145.25
PJM West EL-PK-PJMW-SNL 29.50 26.50
Ercot North EL-PK-ERTN-SNL 38.50 31.00
Mid C EL-PK-MIDC-SNL 37.25 34.50
Palo Verde EL-PK-PLVD-SNL 40.75 40.00
SP-15 EL-PK-SP15-SNL 40.50 40.25
(Reporting by Scott DiSavino; Editing by Edmund Blair, Jane Merriman and David Gregorio)
((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 dropdown and the NORTH AMERICA dropdown 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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