US natgas prices fall 2% to two-month low on big storage build, rising output
11/07/2024 15:31
By Scott DiSavino
July 11 (Reuters) - U.S. natural gas futures fell about 2% to a two-month low on Thursday on a bigger-than-expected weekly
storage build as output rose and the amount of gas flowing to liquefied natural gas (LNG) export plants dropped after Freeport LNG
in Texas shut early this week for Hurricane Beryl.
Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 5 cents, or 2.25, to $2.279 per
million British thermal units (mmBtu) at 11:10 a.m. EDT (1510 GMT), putting the contract on track for its lowest close since May
10 and keeping it in technically oversold territory for a third day.
The U.S. Energy Information Administration (EIA) said energy firms added 65 billion cubic feet (bcf) of gas into storage
during the week ended July 5.
That was more than the 55-bcf build analysts forecast in a Reuters poll and compares with an increase of 57 bcf in the same
week last year and a five-year (2019-2023) average rise of 57 bcf for this time of year. EIA/GAS NGAS/POLL
That build boosted the amount of gas in storage to around 19% above normal levels for this time of year.
Before the latest storage build, traders noted that injections were smaller than usual for eight weeks in a row because
several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March.
Higher prices in April, May and June prompted some producers, including EQT EQT.N and Chesapeake Energy CHK.O , to return
to the well pad. But with prices now down about 12% so far in July, energy traders say it will be interesting to see whether
drillers will keep boosting output over the next month or two.
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 .
Even though power generators were burning near record amounts of gas to keep air conditioners humming during a brutal heat
wave, those gas burns were slightly depressed because roughly 1.3 million homes and businesses were still without power in Texas
on Thursday in the wake of Hurricane Beryl.
At its peak Beryl, which hit Texas on Monday, knocked out power to over 2.7 million customers.
SUPPLY AND DEMAND
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, up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May. 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 mostly hotter than normal through at least July 26.
With hotter weather expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will rise from
106.3 bcfd this week to 106.6 bcfd next week. The forecast for next week was lower than LSEG's outlook on Wednesday.
Gas flows to the seven big U.S. LNG export plants fell to 12.2 bcfd so far in July after Freeport LNG in Texas shut 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.
Sources told Reuters that Freeport LNG could restart by Thursday.
Week ended Week ended Year ago Five-year
July 5 June 28 July 5 average
Actual Actual July 5
U.S. weekly natgas storage change (bcf): +65 +32 +57 +57
U.S. total natgas in storage (bcf): 3,199 3,134 2,915 2,695
U.S. total storage versus 5-year average 18.7% 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 2.31 2.33 2.64 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 9.92 9.77 9.58 13.04 14.39
Japan Korea Marker (JKM) JKMc1 12.35 12.37 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 3 3 3 3
U.S. GFS CDDs 252 261 226 211 204
U.S. GFS TDDs 255 264 229 214 207
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 102.0 102.3 102.1 102.1 95.5
U.S. Imports from Canada 8.l 8.2 7.9 N/A 7.8
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 110.0 110.5 110.0 N/A 112.5
U.S. Demand (bcfd)
U.S. Exports to Canada 1.7 1.3 1.3 N/A 2.3
U.S. Exports to Mexico 6.6 6.8 6.8 N/A 6.1
U.S. LNG Exports 12.4 11.6 11.7 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 49.7 49.7 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 5.0 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 86.6 86.8 81.3 79.9
Total U.S. Demand 99.1 106.3 106.6 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 2023 2022 2021
Jul 12 Jul 5
Wind 5 9 10 11 10
Solar 5 6 4 3 3
Hydro 6 6 6 6 7
Other 1 1 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 48 43 41 38 37
Coal 18 17 17 21 23
Nuclear 17 18 19 19 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 2.40 2.42
Transco Z6 New York NG-CG-NY-SNL 1.80 1.96
PG&E Citygate NG-CG-PGE-SNL 3.40 3.18
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.56 1.60
Chicago Citygate NG-CG-CH-SNL 1.84 1.92
Algonquin Citygate NG-CG-BS-SNL 1.92 2.09
SoCal Citygate NG-SCL-CGT-SNL 2.97 2.74
Waha Hub NG-WAH-WTX-SNL 1.55 1.91
AECO NG-ASH-ALB-SNL 0.95 0.75
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 56.00 123.00
PJM West EL-PK-PJMW-SNL 37.75 98.75
Ercot North EL-PK-ERTN-SNL 29.50 28.25
Mid C EL-PK-MIDC-SNL 145.00 102.67
Palo Verde EL-PK-PLVD-SNL 115.50 129.00
SP-15 EL-PK-SP15-SNL 96.75 112.00
(Reporting by Scott DiSavino; Editing by 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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