U.S. natgas futures jump to 14-week high on warmer outlook
01/06/2021 14:48
June 1 (Reuters) - U.S. natural gas futures rose to a 14-week high on Tuesday on forecasts for warmer than
previously expected weather over the next two weeks that should boost the amount of gas power generators burn to
keep air conditioners humming.
Traders also noted that output was on track to decline at the same time soaring global gas prices pushed
U.S. exports to near record highs.
Front-month gas futures NGc1 rose 15.1 cents, or 5.1%, to $3.137 per million British thermal units (mmBtu)
by 10:05 a.m. EDT (1405 GMT), putting the contract on track for its highest close since Feb. 17.
Despite the big gain on Tuesday, speculators last week boosted their futures and options shorts on the New
York Mercantile Exchange (NYMEX) to the highest since July 2020 because forecasts then were calling for mild
weather through mid June. That helped cause the first drop in speculative net long positions on the NYMEX and
Intercontinental Exchanges in four weeks.
Data provider Refinitiv said gas output in the Lower 48 U.S. states slipped to a preliminary 89.7 billion
cubic feet per day (bcfd) on the first day of June, down from an average of 91.0 bcfd in May. That compares with
a monthly record high of 95.4 bcfd in November 2019.
With warmer weather coming, Refinitiv projected average gas demand, including exports, would rise from 85.4
bcfd this week to 90.2 bcfd next week. The forecast for this week was higher than Refinitiv predicted on Friday
before the long U.S. Memorial Day weekend.
The amount of gas flowing to U.S. LNG export plants rose to a preliminary 11.1 bcfd on the first day of
June, up from an average of 10.8 bcfd in May. That compares with an all-time monthly high of 11.5 bcfd.
With European TRNLTTFMc1 gas prices near their highest since September 2018 and Asian JKMc1 prices over
$10 per mmBtu, analysts said they expect buyers around the world to keep purchasing all the LNG the U.S. can
provide.
U.S. pipeline exports to Mexico, meanwhile, rose to a preliminary 6.64 bcfd on the first day of June, up
from an average of 6.11 bcfd in May, according to Refinitiv data. That compares with an all-time monthly high of
6.14 bcfd in April.
Week ended Week ended Year ago Five-year
May 28 May 21 May 28 average
(Forecast) (Actual) May 28
U.S. natgas storage (bcf): +92 +115 +103 +96
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2020 (2016-2020)
Henry Hub NGc1 3.07 2.99 1.70 2.13 2.66
Title Transfer Facility (TTF) TRNLTTFMc1 9.38 8.94 1.74 3.24 5.19
Japan Korea Marker (JKM) JKMc1 10.40 10.38 2.14 4.22 6.49
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 8 25 17 20 24
U.S. GFS CDDs 169 145 146 142 132
U.S. GFS TDDs 177 170 163 162 156
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 91.3 91.6 87.2 80.3
U.S. Imports from Canada 6.3 6.3 7.l 7.0 7.8
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 97.6 97.6 98.7 94.2 88.2
U.S. Demand (bcfd)
U.S. Exports to Canada 2.3 2.9 3.2 2.3 2.1
U.S. Exports to Mexico 6.1 6.4 6.1 5.2 4.5
U.S. LNG Exports 10.5 11.1 11.3 4.6 2.6
U.S. Commercial 4.9 5.1 4.5 4.6 4.6
U.S. Residential 4.6 4.8 3.8 3.9 4.2
U.S. Power Plant 27.5 27.2 33.5 33.8 32.1
U.S. Industrial 21.3 21.5 21.3 21.3 20.6
U.S. Plant Fuel 4.5 4.5 4.5 4.5 4.5
U.S. Pipe Distribution 1.7 1.7 1.9 1.7 1.7
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 64.7 65.0 69.6 69.9 67.8
Total U.S. Demand 83.6 85.4 90.2 82.0 77.0
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 2.91 2.85
Transco Z6 New York NG-CG-NY-SNL 2.36 2.30
PG&E Citygate NG-CG-PGE-SNL 3.90 3.78
Dominion South NG-PCN-APP-SNL 2.21 2.13
Chicago Citygate NG-CG-CH-SNL 2.79 2.70
Algonquin Citygate NG-CG-BS-SNL 2.17 2.05
SoCal Citygate NG-SCL-CGT-SNL 4.75 3.55
Waha Hub NG-WAH-WTX-SNL 2.65 2.60
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 27.75 26.50
PJM West EL-PK-PJMW-SNL 23.25 21.75
Ercot North EL-PK-ERTN-SNL 28.00 29.50
Mid C EL-PK-MIDC-SNL 75.82 26.75
Palo Verde EL-PK-PLVD-SNL 33.00 26.00
SP-15 EL-PK-SP15-SNL 36.75 27.00
(Reporting by Scott DiSavino
Editing by Marguerita Choy)
((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 ))