US natgas futures rebound ahead of March contract expiry

Southwestern Energy Co

26/02/2024 15:31

Feb 26 (Reuters) - U.S. natural gas futures gained more than 6% on Monday, ahead of the expiration of the March contract,
in a technical rebound following a sharp retreat in the last two sessions. 
    Front-month gas futures  NGc1  were down 7.5% or 12.9 cents to settle at $1.603 per million British thermal units. The March
contract is set to expire on Tuesday. 
    The market seems to have found a bottom, with the "negative news experienced most of the winter, with low demand, (having) run
its course at this point," said Gary Cunningham, director of market research at Tradition Energy.
    "Now we're looking forward to where do we go from here and that's where you're starting to see those CapEx cuts have a bigger
impact and a return to more normal weather patterns for the summer."
    On Wednesday, prices soared about 13% after Chesapeake Energy  CHK.O , soon to be the biggest U.S. gas producer after its
merger with Southwestern Energy  SWN.N , cut planned production for 2024 by roughly 30% after a recent plunge in prices to a 3-1/2
year low.
    Natural gas prices have plunged 32% so far this year, hurt by a mild winter that has left stockpiles well above normal, while
output remained near record levels despite an Arctic freeze in January that briefly cut output and sent gas demand to a record
high.
    Financial company LSEG said gas output in the U.S. Lower 48 states has risen to an average of 105.5 billion cubic feet per day
(bcfd) so far in February from 102.1 bcfd in January, still shy of the monthly record of 106.3 bcfd in December.
    "Production curtailments may prove capable of placing a bottom in this market within the next few weeks, but we still see
April futures drafting back down to about the $1.60 level, the low established just prior to the announced production cuts,"
energy advisory Ritterbusch and Associates said in a note.
    QatarEnergy chief Saad al-Kaabi said on Sunday a new expansion of its liquefied natural gas (LNG) production will add 16
million metric tons per year to its expansion plans, bringing total capacity to 142 million tons per year (tpy).
    The European benchmark wholesale gas price also declined, remaining near its lowest level in around three years, as weak
demand and high storage inventories outweighed cold weather forecasts and lower renewables output.  NG/EU 
                                                                   Week ended   Week ended    Year ago     Five-year         
                                                                     Feb 23       Feb 16       Feb 23       average    
                                                                    Forecast      Actual                    Feb 23     
 U.S. weekly natgas storage change (bcf):                             -97           -60         -79          -143            
 U.S. total natgas in storage (bcf):                                 2,373         2,470        2,126        1,876           
 U.S. total storage versus 5-year average                            26.5%                                                   
                                                                                                                             
                                                                                                                             
 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                                                      1.73         1.62         2.44         2.66         3.60
 Title Transfer Facility (TTF)  TRNLTTFMc1                            7.53         7.25         16.52        13.04        14.39
 Japan Korea Marker (JKM)  JKMc1                                      8.13         8.16         16.87        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                                                       258.5          267                                    346
 U.S. GFS CDDs                                                        9.6            8                                      8
 U.S. GFS TDDs                                                       268.1          275                                    354
                                                                                                                             
 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                                            105.1        103.5        103.9        101.3         92.4
 U.S. Imports from Canada                                                  9.0          8.7          8.7          8.7          9.1
 U.S. LNG Imports                                                          0.0          0.0          0.0          0.0          0.2
 Total U.S. Supply                                                       114.1        112.2        112.5        110.0        101.7
                                                                                                                                  
 U.S. Demand (bcfd)                                                                                                               
 U.S. Exports to Canada                                                    3.5          3.6          3.6          2.6          2.7
 U.S. Exports to Mexico                                                    6.4          5.7          6.2          5.8          5.2
 U.S. LNG Exports                                                         13.6         13.9         13.7         12.8          8.4
 U.S. Commercial                                                          14.8         12.9         11.3         14.1         16.3
 U.S. Residential                                                         23.8         20.0         17.6         22.6         27.6
 U.S. Power Plant                                                         34.3         31.3         31.4         30.3         29.3
 U.S. Industrial                                                          24.9         24.2         23.5         24.1         25.4
 U.S. Plant Fuel                                                           5.2          5.1          5.1          5.2          5.3
 U.S. Pipe Distribution                                                    2.8          2.6          2.4          2.7          2.7
 U.S. Vehicle Fuel                                                         0.1          0.1          0.1          0.1          0.1
 Total U.S. Consumption                                                  105.9         96.1         91.5         99.1        106.7
 Total U.S. Demand                                                       129.4        119.3        115.1        120.3        123.0
                                                                                                                                  
                                                                                                                       
 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam   Current Day   Prior Day       2023      2022         2021      
                                                                  % of Normal   % of Normal  % of Normal  % of Normal  % of Normal
                                                                    Forecast     Forecast      Actual       Actual       Actual
 Apr-Sep                                                               81           79           83           107          81
 Jan-Jul                                                               83           81           77           102          79
 Oct-Sep                                                               82           81           76           103          81
                                                                                                                        
                                                                                                                        
 U.S. weekly power generation percent by fuel - EIA                                                                               
                                                                   Week ended   Week ended   Week ended   Week ended   Week ended
                                                                    March 1       Feb 23       Feb 16        Feb 9        Feb 2
 Wind                                                                               12           11           14            9
 Solar                                                                               4            4            3            3
 Hydro                                                                               7            7            7            7
 Other                                                                               1            1            1            2
 Petroleum                                                                           0            0            0            0
 Natural Gas                                                                        41           41           38           40
 Coal                                                                               15           16           16           18
 Nuclear                                                                            20           21           21           20
                                                                                                                             
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                                                          
 Hub                                                              Current Day    Prior Day                                   
 Henry Hub  NG-W-HH-SNL                                                   1.52         1.62                                       
 Transco Z6 New York  NG-CG-NY-SNL                                        1.49         1.35                                       
 PG&E Citygate  NG-CG-PGE-SNL                                             2.49         2.71                                       
 Eastern Gas (old Dominion South)  NG-PCN-APP-SNL                         1.39         1.21                                       
 Chicago Citygate  NG-CG-CH-SNL                                           1.35         1.45                                       
 Algonquin Citygate  NG-CG-BS-SNL                                         3.23         2.10                                       
 SoCal Citygate  NG-SCL-CGT-SNL                                           2.37         2.83                                       
 Waha Hub  NG-WAH-WTX-SNL                                                 0.19         0.84                                       
 AECO  NG-ASH-ALB-SNL                                                     1.62         1.63                                       
                                                                                                                                  
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                                                             
 Hub                                                              Current Day    Prior Day                                        
 New England  EL-PK-NPMS-SNL                                             30.75        29.50                                       
 PJM West  EL-PK-PJMW-SNL                                                27.25        23.25                                       
 Ercot North  EL-PK-ERTN-SNL                                             10.25        21.50                                       
 Mid C  EL-PK-MIDC-SNL                                                   35.66        45.27                                       
 Palo Verde  EL-PK-PLVD-SNL                                              22.25        25.10                                       
 SP-15  EL-PK-SP15-SNL                                                   21.50        28.00                                       
 
 (Reporting by Ashitha Shivaprasad and Anjana Anil in Bengaluru; Editing by David Evans)
 ((Ashitha.Shivaprasad@thomsonreuters.com;))
 
((For gas data on LSEG's Eikon 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 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 ))