US natgas prices up 3% to 14-week high on rising demand for LNG feedgas (updated)
06/05/2024 17:34
(Adds latest prices)
By Scott DiSavino
May 6 (Reuters) - U.S. natural gas futures gained about 3% to a 14-week high on Monday on forecasts for higher demand over
the next two weeks than previously expected as feedgas to liquefied natural gas (LNG) export plants increased with the return of
Freeport LNG in Texas.
Prices were also supported by an ongoing decline in output.
Front-month gas futures NGc1 for June delivery on the New York Mercantile Exchange rose 5.3 cents, or 2.5%, to settle at
$2.195 per million British thermal units (mmBtu), the highest close since Jan. 29 for a second day in a row.
U.S. gas production was down about 9% 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, analysts said upcoming gas pipeline maintenance on U.S. energy company Kinder Morgan's KMI.N
Permian Highway Pipeline from May 7-12 and Gulf Coast Express from May 14-21 could push average next-day gas prices at the Waha
Hub NG-WAH-WTX-SNL in West Texas back into negative territory for the first time since mid-April.
Reductions on those and other pipes in Texas over the past month or so trapped gas in the Permian Shale and helped push Waha
prices below zero for several days last month.
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.
Meteorologists projected weather across the Lower 48 states would go from warmer than normal from May 6-9 to near-normal from
May 10-17 before switching back to warmer than normal from May 18-21.
LSEG forecast gas demand in the Lower 48, including exports, would slide from 93.4 bcfd this week to 91.0 bcfd next week.
Those forecasts were higher than LSEG's outlook on Friday.
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 slow return of Freeport. That compares with a monthly record of 14.7 bcfd in December.
The amount of gas flowing to the 2.1-bcfd Freeport hit a two-month high of 1.4 bcfd on Sunday, up from 1.2 bcfd on Saturday
and an average of 0.4 bcfd in April.
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 war in Ukraine.
Gas was trading around $10 per mmBtu at both the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and the
Japan Korea Marker (JKM) benchmark in Asia JKMc1 . NG/EU
Week ended Week ended Year ago Five-year
May 3 Apr 26 May 3 average
Forecast Actual May 3
U.S. weekly natgas storage change (bcf): +89 +59 +71 +81
U.S. total natgas in storage (bcf): 2,573 2,484 2,119 1,923
U.S. total storage versus 5-year average 33.8% 34.9%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2023 (2018-2022)
Henry Hub NGc1 2.17 2.14 2.30 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 9.74 9.50 9.97 13.04 14.39
Japan Korea Marker (JKM) JKMc1 10.47 10.41 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 50 55 48 75 73
U.S. GFS CDDs 83 76 83 73 73
U.S. GFS TDDs 133 131 131 148 146
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 97.2 102.4 94.4
U.S. Imports from Canada 7.2 7.1 6.7 7.3 7.5
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0
Total U.S. Supply 103.9 104.4 103.8 109.7 101.9
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 5.4 6.1 6.3 5.6
U.S. LNG Exports 12.3 12.4 12.3 13.0 8.8
U.S. Commercial 5.9 5.6 5.3 5.4 5.8
U.S. Residential 6.3 6.0 5.1 5.8 6.9
U.S. Power Plant 30.6 33.2 31.5 31.0 28.4
U.S. Industrial 21.8 21.8 21.8 21.4 21.5
U.S. Plant Fuel 4.8 4.8 4.8 4.8 4.8
U.S. Pipe Distribution 1.9 2.0 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 73.5 70.6 70.4 69.4
Total U.S. Demand 91.8 93.4 91.0 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 78 83 107 81
Jan-Jul 78 79 77 102 79
Oct-Sep 80 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 14 14 16 16 16
Solar 5 6 6 6 6
Hydro 7 7 7 7 7
Other 2 2 1 2 1
Petroleum 0 0 0 0 0
Natural Gas 40 40 37 37 37
Coal 13 13 13 13 13
Nuclear 19 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 1.67 1.66
Transco Z6 New York NG-CG-NY-SNL 1.44 1.37
PG&E Citygate NG-CG-PGE-SNL 2.21 2.35
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.32 1.32
Chicago Citygate NG-CG-CH-SNL 1.46 1.44
Algonquin Citygate NG-CG-BS-SNL 1.43 1.41
SoCal Citygate NG-SCL-CGT-SNL 1.45 1.50
Waha Hub NG-WAH-WTX-SNL 0.25 0.96
AECO NG-ASH-ALB-SNL 0.92 1.00
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 25.00 24.00
PJM West EL-PK-PJMW-SNL 29.00 37.00
Ercot North EL-PK-ERTN-SNL 21.75 40.25
Mid C EL-PK-MIDC-SNL 33.50 60.00
Palo Verde EL-PK-PLVD-SNL 11.75 8.50
SP-15 EL-PK-SP15-SNL 12.50 9.50
(Reporting by Scott DiSavino; editing by Jonathan Oatis 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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