US natgas prices soar 9% to 5-week high on output drop, jump in demand (updated)

Comstock Resources

11/11/2024 19:45

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      Spot gas prices at Henry Hub fall to 25-year low
    

        * 
      Daily gas output falls to nine-month low
    

        * 
      Meteorologists project seasonally cold weather in late November
    

  
 (Adds latest prices)
    By Scott DiSavino
       Nov 11 (Reuters) - U.S. natural gas futures soared about 9% to a five-week high on Monday on a drop in daily output over the
past few days, forecasts for much cooler weather and more heating demand over the next two weeks than previously expected, and a
possible speculative short squeeze.
        The heating demand should cause utilities to start pulling gas out of storage in late November.
    There is currently about 6% more gas in storage than normal for this time of year. Analysts projected utilities added more gas
than normal into storage last week for a fourth week in a row for the first time since October 2022.  EIA/GAS   NGAS/POLL 
    Prior to the last few weeks, storage injections had been smaller than usual for 14 weeks in a row because many producers have
reduced drilling activities this year after average spot monthly prices at the U.S. Henry Hub  NG-W-HH-SNL  benchmark in Louisiana
fell to a 32-year low for the month of March. Prices have remained relatively low since then, dropping to a 23-year low for the
month of October.
    Front-month gas futures  NGc1  for December delivery on the New York Mercantile Exchange rose 25.1 cents, or 9.4%, to settle at
$2.920 per million British thermal units, their highest close since Oct. 3.
    The tremendous gain, which was the biggest daily percentage increase since prices soared 21% on Oct. 30, cut the premium of
futures for January over December  NGZ24-F25  to just 21 cents per mmBtu, the lowest since November 2022.
    The jump in gas prices also boosted stock prices for several U.S. gas producers, including a 7% increase for Antero Resources
 AR.N , a 6% increase for Comstock Resources  CRK.N  and a 5% increase for EQT  EQT.N .
        Even though gas futures gained about 18% over the prior three weeks, speculators boosted their net short futures and options
positions on the New York Mercantile and Intercontinental Exchanges for a second week in a row last week to their highest since
April, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report.
    "The weekend (weather) shift could catch aggressive speculator shorts off-guard, and, if momentum can be sustained, potentially
trigger a near-term short squeeze to drive NYMEX futures steeply higher first," analysts at energy consulting firm EBW Analytics
said in a note.
        In the spot market, gas prices plunged to a 25-year low at the Henry Hub benchmark  NG-W-HH-SNL  in Louisiana and dropped
into negative territory for a record 47th time at the Waha hub  NG-WAH-WTX-SNL  in West Texas.
         
    SUPPLY AND DEMAND
    Financial firm LSEG said average gas output in the Lower 48 U.S. states slid to 100.1 billion cubic feet per day (bcfd) so far
in November from 101.3 bcfd in October. That compares with a record 105.3 bcfd in December 2023.
    On a daily basis, output over the past three days fell by 2.3 bcfd to a preliminary nine-month low of 98.2 bcfd on Monday.
Analysts have noted that preliminary data is often revised later in the day.
    Some of that output drop was due to curtailments in the Gulf of Mexico for Hurricane Rafael, which has since dissipated.
        Meteorologists projected the weather in the Lower 48 states will switch from warmer than normal from now through Nov. 20 to
near normal from Nov. 21-26.
    With colder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 108.3 bcfd this
week to 110.8 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.
        
                                                                     Week ended   Week ended    Year ago     Five-year         
                                                                        Nov 8        Nov 1        Nov 8       average          
                                                                      Forecast      Actual                     Nov 8     
 U.S. weekly natgas storage change (bcf):                                +49          +69          +41          +29            
 U.S. total natgas in storage (bcf):                                    3,981        3,932        3,816        3,746           
 U.S. total storage versus 5-year average                               6.3%         5.8%                                      
                                                                                                                               
                                                                                                                               
 Global Gas Benchmark Futures ($ per mmBtu)                          Current Day   Prior Day   This Month   Prior Year    Five-Year
                                                                                                Last Year     Average      Average
                                                                                                               2023      (2018-2022)
 Henry Hub  NGc1                                                        2.86         2.67         3.06         2.66         3.60
 Title Transfer Facility (TTF)  TRNLTTFMc1                              13.65        13.24        14.45        13.04        14.39
 Japan Korea Marker (JKM)  JKMc1                                        13.55        13.50        17.02        14.39        14.31
                                                                                                                               
                                                                                                                               
 LSEG 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                                                           253          204          255          283          291
 U.S. GFS CDDs                                                           14           22           10           12           10
 U.S. GFS TDDs                                                           267          226          265          295          301
                                                                                                                               
 LSEG U.S. Weekly GFS Supply and Demand Forecasts                                                                              
                                                                     Prior Week     Current     Next Week    This Week    Five-Year
                                                                                     Week                    Last Year   (2019-2023)
                                                                                                                         Average For
                                                                                                                            Month
 U.S. Supply (bcfd)                                                                                                                 
 U.S. Lower 48 Dry Production                                              100.9         99.1         99.7        104.3         98.0
 U.S. Imports from Canada                                                    8.5          8.5          7.7          N/A          7.8
 U.S. LNG Imports                                                            0.0          0.0          0.0          0.0          0.1
 Total U.S. Supply                                                         109.4        107.6        107.4          N/A        105.9
                                                                                                                                    
 U.S. Demand (bcfd)                                                                                                                 
 U.S. Exports to Canada                                                      2.4          2.3          2.2          N/A          2.9
 U.S. Exports to Mexico                                                      5.6          5.8          5.8          N/A          5.5
 U.S. LNG Exports                                                           12.4         13.9         14.1         13.8         11.0
 U.S. Commercial                                                             8.0          9.6         10.6          8.8         11.5
 U.S. Residential                                                           10.6         13.6         16.2         11.8         16.8
 U.S. Power Plant                                                           33.1         32.7         31.0         28.7         28.8
 U.S. Industrial                                                            22.7         23.1         23.5         22.6         24.3
 U.S. Plant Fuel                                                             5.0          4.9          4.9          5.0          5.3
 U.S. Pipe Distribution                                                      2.2          2.3          2.4          2.1          3.2
 U.S. Vehicle Fuel                                                           0.1          0.1          0.1          0.1          0.1
 Total U.S. Consumption                                                     81.7         86.3         88.7         79.1         90.0
 Total U.S. Demand                                                         102.1        108.3        110.8          N/A        109.4
                                                                                                                                    
 N/A is Not Available                                                                                                     
                                                                                                                          
 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam         2025         2025         2024         2003         2022
                                                                     Current Day   Prior Day   % of Normal  % of Normal  % of Normal
                                                                     % of Normal  % of Normal    Actual       Actual       Actual
                                                                      Forecast     Forecast                              
 Apr-Sep                                                                 95           96           74           83           107
 Jan-Jul                                                                 90           91           76           77           102
 Oct-Sep                                                                 92           93           77           76           103
                                                                                                                          
                                                                                                                          
 U.S. weekly power generation percent by fuel - EIA                                                                                 
                                                                     Week ended   Week ended      2023         2022         2021
                                                                       Nov 15       Nov 8                                
 Wind                                                                    11           13           10           11           10
 Solar                                                                    5            4            4            3            3
 Hydro                                                                    5            5            6            6            7
 Other                                                                    2            2            2            2            2
 Petroleum                                                                0            0            0            0            0
 Natural Gas                                                             42           43           41           38           37
 Coal                                                                    13           14           17           21           23
 Nuclear                                                                 21           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                                                     1.21         1.49                                       
 Transco Z6 New York  NG-CG-NY-SNL                                          1.06         1.35                                       
 PG&E Citygate  NG-CG-PGE-SNL                                               1.92         2.34                                       
 Eastern Gas (old Dominion South)  NG-PCN-APP-SNL                           1.00         1.25                                       
 Chicago Citygate  NG-CG-CH-SNL                                             1.21         1.44                                       
 Algonquin Citygate  NG-CG-BS-SNL                                           1.15         1.52                                       
 SoCal Citygate  NG-SCL-CGT-SNL                                             1.31         1.98                                       
 Waha Hub  NG-WAH-WTX-SNL                                                  -1.06         0.32                                       
 AECO  NG-ASH-ALB-SNL                                                       0.63         0.38                                       
                                                                                                                                    
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                                                               
 Hub                                                                 Current Day   Prior Day                                        
 New England  EL-PK-NPMS-SNL                                               32.25        34.00                                       
 PJM West  EL-PK-PJMW-SNL                                                  24.75        30.75                                       
 Ercot North  EL-PK-ERTN-SNL                                               19.50        25.00                                       
 Mid C  EL-PK-MIDC-SNL                                                     31.50        38.26                                       
 Palo Verde  EL-PK-PLVD-SNL                                                23.75        31.50                                       
 SP-15  EL-PK-SP15-SNL                                                     23.50        31.00                                       
 
 (Reporting by Scott DiSavino; Editing by Andrea Ricci and Leslie Adler)
 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))
 
((For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.
For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG 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 ))