US natgas prices edge up to 14-week high on lower output, Texas heat (updated)
07/05/2024 19:48
(Adds latest prices)
By Scott DiSavino
May 7 (Reuters) - U.S. natural gas futures rose about 1% to a 14-week high on Tuesday on a decline in output, an increase
in feedgas to liquefied natural gas (LNG) export plants and forecasts for hot weather in Texas that should boost air conditioning
demand.
Limiting gains was a forecast calling for demand to decline more than expected over the next two weeks and an ongoing
oversupply of gas in storage.
Analysts forecast gas stockpiles were about 34% above normal for this time of year.
Front-month gas futures NGc1 for June delivery on the New York Mercantile Exchange rose 1.2 cents, or 0.5%, to settle at
$2.207 per million British thermal units (mmBtu), their highest close since Jan. 29 for a third day in a row.
That kept the front-month in technically oversold territory for a third straight day for the first time since January 2024.
U.S. gas production was down about 11% so far in 2024 after several energy firms, including EQT EQT.N and Chesapeake Energy
CHK.O , delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and
March.
EQT is currently the biggest U.S. gas producer and Chesapeake is on track to become the biggest producer after its merger with
Southwestern Energy SWN.N .
In the spot market, meanwhile, U.S. power and gas prices turned negative in Texas, California and Arizona as pipeline
maintenance trapped gas in the Permian Shale in West Texas amid low demand for energy and ample hydropower in the West.
In Texas, the Electric Reliability Council of Texas (ERCOT) issued a Weather Watch for Wednesday "due to unseasonably high
temperatures, high levels of expected maintenance outages during the spring shoulder months, and the potential for lower
reserves."
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 96.9 billion cubic feet per day (bcfd)
so far in May, down from 98.1 bcfd in April. That compares with a monthly record of 105.5 bcfd in December 2023.
On a daily basis, output was on track to drop by around 3.1 bcfd over the past four days to a preliminary 15-week low of 94.7
bcfd on Tuesday.
Meteorologists projected weather across the Lower 48 states would go from mostly near normal now through May 14 to warmer than
normal from May 15-22.
LSEG forecast gas demand in the Lower 48, including exports, would slide from 92.6 bcfd this week to 90.4 bcfd next week.
Those forecasts were lower than LSEG's outlook on Monday.
Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 bcfd in April to 12.4 bcfd so far in May with
the return of Freeport in Texas from maintenance and inspection work. That compares with a monthly record of 14.7 bcfd in
December.
The amount of gas flowing to the 2.1-bcfd Freeport plant was on track to hold near a two-month high of 1.4 bcfd for a third
day in a row on Tuesday, up from an average of 0.4 bcfd in April.
Week ended Week ended Year ago Five-year
May 3 Apr 26 May 3 average
Forecast Actual May 3
U.S. weekly natgas storage change (bcf): +89 +59 +71 +81
U.S. total natgas in storage (bcf): 2,573 2,484 2,119 1,923
U.S. total storage versus 5-year average 33.8% 34.9%
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 2.21 2.20 2.30 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 9.65 10.03 9.97 13.04 14.39
Japan Korea Marker (JKM) JKMc1 10.47 10.47 10.45 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 44 50 48 75 70
U.S. GFS CDDs 89 83 83 73 75
U.S. GFS TDDs 133 133 131 148 145
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 96.8 97.2 97.5 102.4 94.4
U.S. Imports from Canada 7.2 7.2 6.8 7.3 7.5
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0
Total U.S. Supply 103.9 104.4 104.2 109.7 101.9
U.S. Demand (bcfd)
U.S. Exports to Canada 2.1 2.1 2.0 1.8 2.4
U.S. Exports to Mexico 5.8 5.2 6.1 6.3 5.6
U.S. LNG Exports 12.3 12.4 12.2 13.0 8.8
U.S. Commercial 5.9 5.6 5.2 5.4 5.8
U.S. Residential 6.3 6.0 4.9 5.8 6.9
U.S. Power Plant 30.6 32.8 31.5 31.0 28.4
U.S. Industrial 21.8 21.8 21.7 21.4 21.5
U.S. Plant Fuel 4.8 4.8 4.8 4.8 4.8
U.S. Pipe Distribution 1.9 1.9 1.9 1.9 1.9
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 71.5 73.0 70.1 70.4 69.4
Total U.S. Demand 91.8 92.6 90.4 91.5 86.2
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 77 77 83 107 81
Jan-Jul 78 78 77 102 79
Oct-Sep 79 80 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
May 10 May 3 Apr 26 Apr 19 Apr 12
Wind 13 14 16 16 16
Solar 5 6 6 6 6
Hydro 7 7 7 7 7
Other 1 2 1 2 1
Petroleum 0 0 0 0 0
Natural Gas 41 40 37 37 37
Coal 13 13 13 13 13
Nuclear 20 19 19 20 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 1.88 1.67
Transco Z6 New York NG-CG-NY-SNL 1.67 1.44
PG&E Citygate NG-CG-PGE-SNL 2.40 2.21
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.57 1.32
Chicago Citygate NG-CG-CH-SNL 1.60 1.46
Algonquin Citygate NG-CG-BS-SNL 1.64 1.43
SoCal Citygate NG-SCL-CGT-SNL 1.68 1.45
Waha Hub NG-WAH-WTX-SNL -2.72 0.25
AECO NG-ASH-ALB-SNL 0.98 0.92
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 29.75 25.00
PJM West EL-PK-PJMW-SNL 36.50 29.00
Ercot North EL-PK-ERTN-SNL 36.00 21.75
Mid C EL-PK-MIDC-SNL 23.50 33.50
Palo Verde EL-PK-PLVD-SNL -2.00 11.75
SP-15 EL-PK-SP15-SNL -3.25 12.50
(Reporting by Scott DiSavino; Editing by Andrea Ricci and David Gregorio)
((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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