US natgas prices slide 3% on rising output, high stockpiles
29/05/2024 14:31
By Scott DiSavino
May 29 (Reuters) - U.S. natural gas futures slid about 3% on Wednesday on signs some drillers were starting to pull more
gas out of the ground and worries about the tremendous oversupply of gas still in storage.
That price decline came despite forecasts for more demand next week than previously expected and as more gas flowed to
liquefied natural gas (LNG) export plants.
Analysts forecast gas stockpiles were about 27% above normal levels for this time of year. EIA/GAS NGAS/POLL
On its last day as the front-month, gas futures NGc1 for June delivery on the New York Mercantile Exchange fell 6.4 cents,
or 2.5%, to $2.526 per million British thermal units (mmBtu) at 9:11 a.m. EDT (1311 GMT).
Futures for July NGN24 , which will soon be the front-month, were down 2.6% at $2.75 per mmBtu.
In other news, over 512,000 homes and businesses were still without power in Texas and other states due to severe storms over
the past several days.
SUPPLY AND DEMAND
Gas output in the Lower 48 U.S. states fell to an average of 97.7 billion cubic feet per day (bcfd) so far in May, down from
98.2 bcfd in April, according to financial firm LSEG. That compares with a monthly record of 105.5 bcfd in December 2023.
But on a daily basis, output was up about 0.5 bcfd since hitting a 15-week low of 96.3 bcfd on May 1. Energy traders said that
increase was a sign that the 56% gain in futures prices over the past four weeks prompted some drillers to start producing more
gas.
Overall, however, U.S. gas production was still down around 9% so far in 2024 as several energy firms, including EQT EQT.N
and Chesapeake Energy CHK.O , delayed well completions and cut other drilling activities after prices fell to 3-1/2-year lows in
February and March.
EQT is the biggest U.S. gas producer and 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 mostly near normal until June 2 before turning warmer
than normal from June 3-13.
LSEG forecast gas demand in the Lower 48, including exports, would rise from 93.6 bcfd this week to 94.1 bcfd next week. The
forecast for next week was higher than LSEG's outlook on Tuesday.
Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 bcfd in April to 12.8 bcfd so far in May with
the return of Freeport LNG's 2.1-bcfd plant in Texas.
That LNG feedgas, however, remained down from the monthly record of 14.7 bcfd in December due to ongoing spring maintenance at
Kinder Morgan's KMI.N Elba Island in Georgia and several plants in Louisiana, including Cameron LNG, Cheniere Energy's LNG.N
Sabine Pass and Venture Global's Calcasieu Pass.
U.S. exports to Mexico rose to an average of 7.1 bcfd so far in May, up from 6.5 bcfd in April and the current monthly record
of 7.0 bcfd in August 2023. Analysts said that signaled U.S. energy firm New Fortress Energy NFE.O was preparing to turn U.S.
gas into LNG at its export plant in Altamira, Mexico.
Week ended Week ended Year ago Five-year
May 24 May 17 May 24 average
Forecast Actual May 24
U.S. weekly natgas storage change (bcf): +89 +78 +106 +104
U.S. total natgas in storage (bcf): 2,800 2,711 2,415 2,209
U.S. total storage versus 5-year average 26.8% 28.8%
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 2.55 2.59 2.30 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 10.61 10.67 9.97 13.04 14.39
Japan Korea Marker (JKM) JKMc1 11.96 11.94 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 14 14 18 27 27
U.S. GFS CDDs 153 145 106 125 127
U.S. GFS TDDs 167 159 124 152 154
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 97.9 98.7 98.7 102.8 94.4
U.S. Imports from Canada 7.5 6.9 7.0 7.8 7.5
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0
Total U.S. Supply 105.4 105.6 105.7 110.6 101.9
U.S. Demand (bcfd)
U.S. Exports to Canada 1.8 1.7 1.8 2.5 2.4
U.S. Exports to Mexico 7.4 7.1 7.1 6.4 5.6
U.S. LNG Exports 12.9 13.1 13.1 13.4 8.8
U.S. Commercial 4.7 4.7 4.5 4.5 5.8
U.S. Residential 4.2 4.2 3.8 3.9 6.9
U.S. Power Plant 33.4 34.3 35.3 31.8 28.4
U.S. Industrial 21.6 21.6 21.6 21.1 21.5
U.S. Plant Fuel 4.8 4.9 4.9 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 70.7 71.6 72.1 68.1 69.4
Total U.S. Demand 92.9 93.6 94.1 90.4 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 77 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 31 May 24 May 17 May 10 May 3
Wind 12 13 10 13 14
Solar 6 6 6 6 6
Hydro 7 7 8 7 7
Other 1 1 1 1 1
Petroleum 0 0 0 0 0
Natural Gas 39 38 40 41 40
Coal 14 14 14 14 13
Nuclear 20 19 20 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 2.29 2.22
Transco Z6 New York NG-CG-NY-SNL 1.42 1.45
PG&E Citygate NG-CG-PGE-SNL 1.93 1.63
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.35 1.40
Chicago Citygate NG-CG-CH-SNL 1.62 1.63
Algonquin Citygate NG-CG-BS-SNL 1.51 1.55
SoCal Citygate NG-SCL-CGT-SNL 1.35 0.92
Waha Hub NG-WAH-WTX-SNL 0.46 0.45
AECO NG-ASH-ALB-SNL 0.90 0.86
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 28.75 25.75
PJM West EL-PK-PJMW-SNL 30.00 83.75
Ercot North EL-PK-ERTN-SNL 27.50 24.00
Mid C EL-PK-MIDC-SNL 28.50 14.25
Palo Verde EL-PK-PLVD-SNL 4.75 -17.50
SP-15 EL-PK-SP15-SNL 0.75 -18.50
(Reporting by Scott DiSavino, Editing by Nick Zieminski)
((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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