US natgas prices fell 3% on forecasts for lower demand, higher output (updated)
13/06/2024 15:31
(Adds EIA storage report, latest prices)
By Scott DiSavino
June 13 (Reuters) - U.S. natural gas futures fell about 3% on Thursday on lowered demand forecasts for the next two weeks,
expectations supplies will soon rise once the Mountain Valley gas pipeline enters service, and news that recent increases in
prices and demand prompted EQT EQT.N , the nation's biggest gas producer, to start boosting output.
Traders said prices were also pressured by upward revisions to past weeks' storage builds in the latest report even though
last week's storage build was seasonally small for a fifth straight week. Producers cut output after futures prices dropped to
3-1/2-year lows in February and March.
The U.S. Energy Information Administration (EIA) said utilities added 74 billion cubic feet (bcf) of gas into storage during
the week ended June 7. But working gas stocks were revised higher for the five-week period from May 3-31 by increasing inventories
by 6 bcf to 9 bcf for each week during the period.
For the week ended June 7, the stock build was in line with the 74-bcf addition analysts forecast in a Reuters poll and
compares with an increase of 90 bcf in the same week last year and a five-year (2019-2023) average rise of 89 bcf for this time of
year. EIA/GAS NGAS/POLL
This week's build left stockpiles about 24% above normal for this time of year.
Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 10.3 cents, or 3.4%, to $2.942 per
million British thermal units (mmBtu) at 10:42 a.m. EDT (1442 GMT).
Before EIA released the storage report, front-month prices were down about 2.0%.
The futures price decline occurred despite forecasts for hotter weather through at least the end of June that should boost
the amount of gas power generators need to burn to keep air conditioners humming.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.8 billion cubic feet per day (bcfd)
so far in June, down from 98.1 bcfd in May. That compares with a monthly record of 105.5 bcfd in December 2023.
On a daily basis, output was on track to rise by around 0.4 bcfd over the past two days to a preliminary 96.9 bcfd on
Thursday, up from a 20-week low of 96.5 bcfd on Tuesday.
Before recent output declines in June, analysts said increases in May were a sign producers were slowly boosting output due to
a 47% jump in futures prices in April and May. Output hit a six-week high of 99.5 bcfd on May 24. EQT EQT.N said this week that
it started boosting output.
Overall, U.S. gas production was still down around 9% so far in 2024 after several energy firms, including EQT EQT.N and
Chesapeake Energy CHK.O , delayed well completions and cut drilling activities when prices fell in February and March. Chesapeake
is on track to become the biggest producer after its merger with Southwestern Energy SWN.N .
Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least June 28.
LSEG forecast gas demand in the Lower 48, including exports, would jump from 94.9 bcfd this week to 98.5 bcfd next week. Those
forecasts were lower than LSEG's outlook on Wednesday.
Gas flows to the seven big U.S. LNG export plants, meanwhile, rose to 13.1 bcfd so far in June, from 12.9 bcfd in May.
Week ended Week ended Year ago Five-year
June 7 May 31 June 7 average
Actual Actual June 7
U.S. weekly natgas storage change (bcf): +74 +96 +90 +89
U.S. total natgas in storage (bcf): 2,974 2,900 2,610 2,401
U.S. total storage versus 5-year average 23.9% 25.4%
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 3.02 3.05 2.47 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 11.54 11.10 10.32 13.04 14.39
Japan Korea Marker (JKM) JKMc1 12.03 12.00 10.61 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 7 8 14 12 11
U.S. GFS CDDs 218 213 138 160 163
U.S. GFS TDDs 225 221 152 172 174
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 98.3 97.4 97.4 102.7 94.7
U.S. Imports from Canada 7.3 7.4 7.1 N/A 7.8
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0
Total U.S. Supply 105.6 104.8 104.5 N/A 112.5
U.S. Demand (bcfd)
U.S. Exports to Canada 1.8 1.6 1.6 N/A 2.3
U.S. Exports to Mexico 6.7 6.4 6.9 N/A 6.0
U.S. LNG Exports 13.2 12.9 13.0 11.3 8.5
U.S. Commercial 4.5 4.5 4.5 4.5 4.8
U.S. Residential 3.8 3.8 3.8 3.8 4.3
U.S. Power Plant 35.4 37.2 40.1 37.0 36.3
U.S. Industrial 21.6 21.6 21.6 21.2 21.3
U.S. Plant Fuel 4.9 4.8 4.8 4.9 4.9
U.S. Pipe Distribution 1.9 2.0 2.0 1.9 1.9
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 72.2 74.0 77.0 73.4 73.6
Total U.S. Demand 94.0 94.9 98.5 N/A 90.4
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 76 76 83 107 81
Jan-Jul 77 76 77 102 79
Oct-Sep 79 79 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Jun 14 Jun 7 May 31 May 24 May 17
Wind 9 11 11 13 10
Solar 6 6 6 6 6
Hydro 7 7 7 7 8
Other 1 1 1 1 1
Petroleum 0 0 0 0 0
Natural Gas 41 41 40 38 40
Coal 15 15 14 14 14
Nuclear 20 19 20 19 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 2.80 2.71
Transco Z6 New York NG-CG-NY-SNL 1.79 1.30
PG&E Citygate NG-CG-PGE-SNL 2.03 2.16
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.55 1.32
Chicago Citygate NG-CG-CH-SNL 2.22 1.83
Algonquin Citygate NG-CG-BS-SNL 1.79 1.47
SoCal Citygate NG-SCL-CGT-SNL 1.69 1.86
Waha Hub NG-WAH-WTX-SNL 2.00 1.67
AECO NG-ASH-ALB-SNL 0.47 0.62
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 27.50 27.25
PJM West EL-PK-PJMW-SNL 38.00 28.25
Ercot North EL-PK-ERTN-SNL 46.00 41.00
Mid C EL-PK-MIDC-SNL 36.00 28.25
Palo Verde EL-PK-PLVD-SNL 21.75 36.38
SP-15 EL-PK-SP15-SNL 23.50 23.00
(Reporting by Scott DiSavino; Editing by Paul Simao 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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