U.S. natgas rises over 6% on colder forecasts, European price spike (updated)
14/02/2022 20:31
(Adds latest prices)
Feb 14 (Reuters) - U.S. natural gas futures jumped over 6% on Monday on forecasts for cooler weather and
higher heating demand over the next two weeks than previously expected.
Traders also cited an 8% spike in European gas prices which kept demand for U.S. liquefied natural gas
(LNG) exports near record highs. European prices gained in part on the possibility of Russia invading Ukraine
and cutting gas supplies to the rest of Europe.
U.S. front-month gas futures NGc1 for March delivery rose 25.4 cents, or 6.4%, to settle at $4.195 per
million British thermal units (mmBtu), their highest close since Feb. 8.
Gas futures traded around $27 per mmBtu in Europe TRNLTTFMc1 and $25 in Asia JKMc1 .
Since the start of the year, the U.S. market has focused more on changes in U.S. weather and domestic
supply and demand, rather than what is happening around the world. So far in 2022, U.S. gas only followed
European prices about a third of the time versus two-thirds during the fourth quarter of 2021.
But, traders said, a 10% jump in European prices was hard to ignore, noting demand for U.S. LNG will
remain strong so long as global gas prices trade 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.
That is even more true now with heightened concerns Russia could invade Ukraine. If Russia invades, Europe
and the United States would likely impose sanctions on Moscow, which could prompt Russia to cut gas supplies
to Europe. Russia provides around 30%-40% of Europe's gas supplies, totaling about 16.3 bcfd in 2021. NG/GB
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Over the weekend, there were tankers loading at all seven U.S. LNG export plants for the first time ever
after Venture Global last week got approval from federal regulators to load the first cargo at its Calcasieu
Pass LNG plant in Louisiana. A tanker arrived at Calcasieu on Feb. 7 and will likely leave with the plant's
first cargo this week. urn:newsml:reuters.com:*:nL1N2UP1JF urn:newsml:reuters.com:*:nL1N2UM1CA urn:newsml:reuters.com:*:nL1N2UI1T5
The amount of gas flowing to all U.S. LNG export plants rose to an average of 12.6 billion cubic feet per
day (bcfd) so far in February, which would top January's monthly record of 12.4 bcfd, as the Calcasieu
liquefaction trains enter service.
But no matter how high global prices rise, the United States only has capacity to turn about 12.4 billion
cubic feet per day (bcfd) of gas into LNG. The rest of the fuel flowing to LNG facilities is used to run plant
equipment.
Data provider Refinitiv said average output in the U.S. Lower 48 states fell from a record 97.3 bcfd in
December to 94.0 bcfd in January and 92.4 bcfd so far in February as wells in several producing regions froze.
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On a daily basis, however, output soared to 95.2 bcfd on Friday, its highest since Jan. 1, according to
Refinitiv. 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.
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
Week ended Week ended Year ago Five-year
Feb. Feb. 4 Feb. 11 average
11(Forecast) (Actual) Feb. 11
U.S. weekly natgas storage change (bcf): -202 -222 -227 -154
U.S. total natgas in storage (bcf): 1,899 2,101 2,315 2,162
U.S. total storage versus 5-year average -12.2% -9.3%
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 4.14 3.94 2.92 3.73 2.89
Title Transfer Facility (TTF) TRNLTTFMc1 27.24 24.77 6.14 16.04 7.49
Japan Korea Marker (JKM) JKMc1 24.57 24.80 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 353 366 454 383 380
U.S. GFS CDDs 6 5 8 8 6
U.S. GFS TDDs 359 371 462 391 386
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 91.3 94.9 95.2 76.1 83.3
U.S. Imports from Canada 9.3 9.0 9.0 10.7 8.9
U.S. LNG Imports 0.2 0.1 0.1 0.7 0.2
Total U.S. Supply 100.8 104.0 104.2 87.5 92.4
U.S. Demand (bcfd)
U.S. Exports to Canada 2.4 3.0 3.0 1.9 2.7
U.S. Exports to Mexico 5.4 5.1 5.5 4.4 4.8
U.S. LNG Exports 12.5 12.7 12.3 5.0 4.7
U.S. Commercial 17.9 16.7 14.9 22.5 15.6
U.S. Residential 30.1 27.1 24.5 39.5 26.1
U.S. Power Plant 28.2 24.2 23.7 33.8 26.3
U.S. Industrial 25.7 25.1 24.4 27.5 24.5
U.S. Plant Fuel 4.5 4.7 4.7 4.7 4.6
U.S. Pipe Distribution 2.9 2.7 2.5 2.7 3.1
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 109.4 100.6 94.7 130.8 100.3
Total U.S. Demand 129.7 121.4 115.6 142.1 112.5
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Feb 18 Feb 11 Feb 4 Jan 28 Jan 21
Wind 11 12 11 9 11
Solar 3 3 2 2 2
Hydro 7 7 6 7 7
Other 2 2 2 2 2
Petroleum 1 1 1 1 1
Natural Gas 31 33 33 35 33
Coal 23 23 25 26 25
Nuclear 22 20 19 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 4.04 4.03
Transco Z6 New York NG-CG-NY-SNL 11.64 4.46
PG&E Citygate NG-CG-PGE-SNL 4.25 4.39
Dominion South NG-PCN-APP-SNL 3.50 3.30
Chicago Citygate NG-CG-CH-SNL 3.75 3.63
Algonquin Citygate NG-CG-BS-SNL 13.75 3.93
SoCal Citygate NG-SCL-CGT-SNL 3.80 3.78
Waha Hub NG-WAH-WTX-SNL 3.40 3.40
AECO NG-ASH-ALB-SNL 2.97 3.00
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day
New England EL-PK-NPMS-SNL 40.50 45.50
PJM West EL-PK-PJMW-SNL 29.25 22.25
Ercot North EL-PK-ERTN-SNL 42.00 25.25
Mid C EL-PK-MIDC-SNL 27.75 29.25
Palo Verde EL-PK-PLVD-SNL 32.50 37.75
SP-15 EL-PK-SP15-SNL 33.00 38.75
(Reporting by Scott DiSavino; Editing by Alexander Smith 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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