US natgas prices climb 2% on forecasts for more demand
08/07/2024 16:38
By Scott DiSavino
July 8 (Reuters) - U.S. natural gas futures climbed about 2% on Monday on forecasts for more demand next week than
previously expected as a brutal heat wave continues to blanket much of the country, forcing power generators to burn more gas to
produce electricity to keep air conditioners humming.
That price increase came despite forecasts for less demand this week than previously expected, rising output and a drop in the
amount of gas flowing to liquefied natural gas (LNG) export plants after Freeport LNG in Texas ramped down ahead of Hurricane
Beryl.
Hurricane Beryl lashed Texas with strong winds and heavy rain as it churned inland, forcing the closure of oil ports,
cancellation of hundreds of flights and leaving nearly 2 million homes and businesses without power.
Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange rose 3.4 cents, or 1.5%, to $2.353 per
million British thermal units (mmBtu) at 10:48 a.m. EDT (1448 GMT).
Even though prices were up for the first time in six trading days, futures remained in technically oversold territory for a
fourth day in a row for the first time since February.
SUPPLY AND DEMAND
Higher prices in recent weeks, however, prompted some producers, including EQT EQT.N and Chesapeake Energy CHK.O , to start
pulling more gas out of the ground.
EQT is the nation's biggest gas producer and Chesapeake is on track to become the biggest after its planned merger with
Southwestern Energy SWN.N .
Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.4 billion cubic feet per day (bcfd)
so far in July.
That was up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May when many producers reduced drilling
activities after prices fell to 3-1/2-year lows in February and March. U.S. output hit a monthly record high of 105.5 bcfd in
December 2023.
Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 23.
With hotter weather expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will rise from
105.7 bcfd this week to 107.0 bcfd next week. The forecast for this week was lower than LSEG's outlook on Friday, while the
forecast for next week was higher.
Gas flows to the seven big U.S. LNG export plants fell to 12.1 bcfd so far in July after Freeport LNG in Texas ramped down
ahead of Hurricane Beryl on Sunday, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.
The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global
prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's invasion of Ukraine.
Gas was trading at $10 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and $12 at the
Japan Korea Marker (JKM) benchmark in Asia JKMc1 . NG/EU
Week ended Week ended Year ago Five-year
July 5 June 28 July 5 average
Forecast Actual July 5
U.S. weekly natgas storage change (bcf): +52 +32 +57 +57
U.S. total natgas in storage (bcf): 3,186 3,134 2,915 2,695
U.S. total storage versus 5-year average 18.2% 18.8%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2023 (2018-2022)
Henry Hub NGc1 2.32 2.32 2.64 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 10.53 10.50 9.58 13.04 14.39
Japan Korea Marker (JKM) JKMc1 12.49 12.42 11.44 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 3 2 3 3 4
U.S. GFS CDDs 270 262 226 211 203
U.S. GFS TDDs 273 264 229 214 207
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 102.0 102.5 102.2 102.1 95.5
U.S. Imports from Canada 8.l 7.9 7.1 N/A 7.8
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 110.0 11.04 109.4 N/A 112.5
U.S. Demand (bcfd)
U.S. Exports to Canada 1.7 1.3 1.4 N/A 2.3
U.S. Exports to Mexico 6.6 6.7 6.8 N/A 6.1
U.S. LNG Exports 12.4 11.8 12.1 13.0 8.6
U.S. Commercial 4.3 4.3 4.4 4.4 4.5
U.S. Residential 3.5 3.5 3.6 3.6 3.6
U.S. Power Plant 41.9 49.0 49.6 44.5 43.3
U.S. Industrial 21.6 21.6 21.7 21.3 21.3
U.S. Plant Fuel 5.0 5.1 5.1 5.1 4.9
U.S. Pipe Distribution 2.1 2.3 2.3 2.3 2.2
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 78.5 85.9 86.7 81.3 79.9
Total U.S. Demand 99.1 105.7 107.0 N/A 96.9
N/A is Not Available
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 75 75 83 107 81
Jan-Jul 76 76 77 102 79
Oct-Sep 78 78 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Jul 12 Jul 5 Jun 28 Jun 21 Jun 14
Wind 5 9 9 12 9
Solar 6 6 5 6 6
Hydro 6 6 5 6 7
Other 1 1 1 1 1
Petroleum 0 0 0 0 0
Natural Gas 47 43 43 40 41
Coal 17 17 19 18 16
Nuclear 18 18 17 17 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 2.02 2.06
Transco Z6 New York NG-CG-NY-SNL 1.44 1.33
PG&E Citygate NG-CG-PGE-SNL 2.80 2.83
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.34 1.34
Chicago Citygate NG-CG-CH-SNL 1.54 1.58
Algonquin Citygate NG-CG-BS-SNL 1.45 1.43
SoCal Citygate NG-SCL-CGT-SNL 2.04 2.20
Waha Hub NG-WAH-WTX-SNL 1.89 -2.06
AECO NG-ASH-ALB-SNL 0.46 0.53
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 28.00 30.50
PJM West EL-PK-PJMW-SNL 41.00 42.50
Ercot North EL-PK-ERTN-SNL 31.00 27.25
Mid C EL-PK-MIDC-SNL 114.67 41.12
Palo Verde EL-PK-PLVD-SNL 85.50 66.00
SP-15 EL-PK-SP15-SNL 54.00 58.25
(Reporting by Scott DiSavino
Editing by Peter Graff)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))
((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 ))
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