US natgas prices rise 3% as heat wave boosts power demand for gas
09/07/2024 14:36
By Scott DiSavino
July 9 (Reuters) - U.S. natural gas futures climbed about 3% on Tuesday on forecasts for the brutal heat wave blanketing
much of the country to remain in place through at least late July, forcing power generators to burn lots of gas to produce
electricity to keep air conditioners humming.
The price increase came despite forecasts for less demand next week than previously expected, recent increases in output and a
drop in the amount of gas flowing to liquefied natural gas (LNG) export plants after Freeport LNG in Texas shut ahead of Hurricane
Beryl.
Oil and gas companies in Texas were restarting operations after Hurricane Beryl lashed the state with 80-mile per hour (129-km
per hour) winds, damaging property and leaving millions of people without power.
Hurricane Beryl lashed Texas with strong winds and heavy rains as it churned inland, forcing the closure of oil ports,
cancellation of hundreds of flights and leaving over 2.7 million homes and businesses without power. About 2.3 million homes and
businesses in Texas were still without power on Tuesday, down from more than 2.7 million on Monday.
Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange rose 6.2 cents, or 2.6%, to $2.428 per
million British thermal units (mmBtu) at 9:00 a.m. EDT (1300 GMT).
But with gas prices down about 21% over the past four weeks, speculators last week cut their net long futures and options
positions on the New York Mercantile and Intercontinental Exchanges for a second week in a row to their lowest since early June,
according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report.
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.
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.
Higher prices in April, May and June prompted some producers, including EQT EQT.N and Chesapeake Energy CHK.O , to start
pulling more gas out of the ground. On a daily basis, output hit a 17-week high of 103.0 bcfd on Sunday.
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 .
Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 24.
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 12.2 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.
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.
With worries about Hurricane Beryl receding, gas prices fell to a seven-week low of around $10 per mmBtu at the Dutch Title
Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and a three-week low of $12 at the Japan Korea Marker (JKM) benchmark in
Asia JKMc1 . NG/EU
Week ended Week ended Year ago Five-year
July 5 June 28 July 5 average
Forecast Actual July 5
U.S. weekly natgas storage change (bcf): +52 +32 +57 +57
U.S. total natgas in storage (bcf): 3,186 3,134 2,915 2,695
U.S. total storage versus 5-year average 18.2% 18.8%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2023 (2018-2022)
Henry Hub NGc1 2.34 2.37 2.64 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 10.09 10.21 9.58 13.04 14.39
Japan Korea Marker (JKM) JKMc1 12.39 12.49 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 4
U.S. GFS CDDs 267 270 226 211 203
U.S. GFS TDDs 270 273 229 214 207
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 102.0 102.4 102.3 102.1 95.5
U.S. Imports from Canada 8.l 8.0 7.2 N/A 7.8
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 110.0 110.5 109.4 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 11.7 11.9 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 48.9 49.2 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 85.8 86.4 81.3 79.9
Total U.S. Demand 99.1 105.6 106.4 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 6 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 46 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 2.10 2.02
Transco Z6 New York NG-CG-NY-SNL 2.01 1.44
PG&E Citygate NG-CG-PGE-SNL 2.49 2.80
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.61 1.34
Chicago Citygate NG-CG-CH-SNL 1.89 1.54
Algonquin Citygate NG-CG-BS-SNL 2.08 1.45
SoCal Citygate NG-SCL-CGT-SNL 1.92 2.04
Waha Hub NG-WAH-WTX-SNL 0.92 1.89
AECO NG-ASH-ALB-SNL 0.53 0.46
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 79.50 28.00
PJM West EL-PK-PJMW-SNL 102.75 41.00
Ercot North EL-PK-ERTN-SNL 30.50 31.00
Mid C EL-PK-MIDC-SNL 152.50 114.67
Palo Verde EL-PK-PLVD-SNL 72.25 85.50
SP-15 EL-PK-SP15-SNL 69.50 54.00
(Reporting by Scott DiSavino, Editing by Louise Heavens)
((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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