US natgas spirals lower on weak demand and plentiful supplies (updated)
23/02/2024 20:08
(Adds comments in paragraph 6, updates latest price)
Feb 23 (Reuters) - U.S. natural gas futures shed more than 7% on Friday on record output, sufficient fuel in storage and
lower heating demand.
Front-month gas futures NGc1 were down 7.5% or 12.9 cents to settle at $1.603 per million British thermal units.
"The natgas market is simply in excess supply, and there is a lack of seasonal winter demand," said Thomas Saal, senior vice
president for energy at StoneX Financial.
"Prices can always fall further than you think, but it should only last a month or so. Once we are into summer and injection
season starts, prices might recover."
On Wednesday gas prices soared about 13% after Chesapeake Energy CHK.O , soon to be the biggest U.S. gas producer after its
merger with Southwestern Energy SWN.N , cut planned production for 2024 by roughly 30% after a plunge in prices to a 3-1/2 year
low.
"While gas producers are hurting, to what degree the intended production cut or curtailing would impact gas prices remains to
be seen as oil companies are still enjoying a decent level of oil prices and producing associated gas in the meantime," said Zhen
Zhu, managing consultant at C.H. Guernsey and Company in Oklahoma City.
Prices have slid more than 35% so far this year, pressured by a mild winter that has left stockpiles well above normal, while
output remained near record levels despite an Arctic freeze in January that briefly cut output and sent gas demand to a record
high.
The U.S. Energy Information Administration (EIA) on Thursday said utilities pulled a smaller-than-expected 60 billion cubic
feet (bcf) of gas out of storage during the week ended Feb. 16.
That was lower than the 65-bcf withdrawal analysts had forecast in a Reuters poll, and compared with a withdrawal of 75 bcf
during the same week a year ago and a five-year (2019-2023) average decrease of 168 bcf for this time of year. EIA/GAS
The smaller than expected withdrawal "stretched the surplus against the averages out to 450 bcf, with additional expansion of
another 100 bcf or more now possible next month," analysts at energy advisory Ritterbusch and Associates said in a note.
Financial company LSEG said gas output in the U.S. Lower 48 states has risen to an average of 105.5 billion cubic feet per day
(bcfd) so far in February from 102.1 bcfd in January, still shy of the monthly record of 106.3 bcfd in December.
U.S. energy regulators said on Thursday they would decide quickly on Venture Global LNG's request for a one-year extension to
its construction permit for its Calcasieu Pass LNG plant in Louisiana.
The announcement came on the same day that Italian electric firm Edison SPA EDNn.MI and Portugal's Galp Energia GALP.LS
joined three other Venture Global LNG customers in asking to be allowed to challenge the extension request.
The European benchmark gas price was also down for the day, hitting its lowest level in almost three years on high storage
levels and low demand. NG/EU
Elsewhere nearly a third of Shell's SHEL.L profit in the fourth quarter of 2023 came from the $2.4 billion it made in
trading LNG as it captured strong demand ahead of winter, three sources close to the company told Reuters.
Week ended Week ended Year ago Five-year
Feb 23 Feb 16 Feb 23 average
Forecast Actual Feb 23
U.S. weekly natgas storage change (bcf): -97 -60 -79 -143
U.S. total natgas in storage (bcf): 2,373 2,470 2,126 1,876
U.S. total storage versus 5-year average 26.5%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2023 (2018-2022)
Henry Hub NGc1 1.62 1.73 2.44 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 7.25 7.52 16.52 13.04 14.39
Japan Korea Marker (JKM) JKMc1 8.16 8.29 16.87 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 267 265 346
U.S. GFS CDDs 8 6 8
U.S. GFS TDDs 275 271 354
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 105.9 104.6 104.7 101.3 92.4
U.S. Imports from Canada 8.8 8.9 8.9 8.7 9.1
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2
Total U.S. Supply 114.7 113.5 113.7 110.0 101.7
U.S. Demand (bcfd)
U.S. Exports to Canada 3.5 3.6 3.5 2.6 2.7
U.S. Exports to Mexico 6.5 6.4 6.4 5.8 5.2
U.S. LNG Exports 13.9 12.6 13.8 12.8 8.4
U.S. Commercial 13.7 14.4 11.8 14.1 16.3
U.S. Residential 22.1 19.3 18.3 22.6 27.6
U.S. Power Plant 32.3 32.5 32.2 30.3 29.3
U.S. Industrial 24.5 24.1 23.7 24.1 25.4
U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.3
U.S. Pipe Distribution 2.7 2.6 2.5 2.7 2.7
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 100.7 96.2 93.8 99.1 106.7
Total U.S. Demand 124.6 120.6 117.6 120.3 123.0
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 81 79 83 107 81
Jan-Jul 83 81 77 102 79
Oct-Sep 82 81 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Feb 23 Feb 16 Feb 9 Feb 2 Jan 26
Wind 12 11 14 9 7
Solar 4 4 3 3 2
Hydro 7 7 7 7 6
Other 1 1 1 2 2
Petroleum 0 0 0 0 0
Natural Gas 41 41 38 40 43
Coal 15 16 16 18 22
Nuclear 20 21 21 20 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 1.62 1.58
Transco Z6 New York NG-CG-NY-SNL 1.35 1.44
PG&E Citygate NG-CG-PGE-SNL 2.71 2.92
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.21 1.23
Chicago Citygate NG-CG-CH-SNL 1.45 1.54
Algonquin Citygate NG-CG-BS-SNL 2.10 2.07
SoCal Citygate NG-SCL-CGT-SNL 2.83 2.65
Waha Hub NG-WAH-WTX-SNL 0.84 0.95
AECO NG-ASH-ALB-SNL 1.63 1.69
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 29.50 33.00
PJM West EL-PK-PJMW-SNL 23.25 26.50
Ercot North EL-PK-ERTN-SNL 21.50 14.75
Mid C EL-PK-MIDC-SNL 45.27 46.15
Palo Verde EL-PK-PLVD-SNL 25.10 30.50
SP-15 EL-PK-SP15-SNL 28.00 26.25
(Reporting by Ashitha Shivaprasad and Rahul Paswan in Bengaluru; Editing by Jan Harvey and David Gregorio)
((Ashitha.Shivaprasad@thomsonreuters.com;))
((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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