U.S. natgas slips off 30-month peak on milder weather outlook (updated)
06/07/2021 20:52
(Adds latest prices)
July 6 (Reuters) - U.S. natural gas futures retreated from a 30-month high on Tuesday as forecasts pointed to
milder weather and lower demand over the next two weeks than previously expected.
Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 6.3 cents to settle
1.7% lower at $3.637 per million British thermal units (mmBtu) at 3:18 p.m. EDT. The session high of $3.822 was its
highest since late 2018.
"Forecasts show a broader area of normal-to-below normal temperatures, especially in the gas consuming areas,
weighing on the market," said Thomas Saal, senior vice president of energy at StoneX.
But "the hottest weather is ahead of us across the country with the southeast not far above normal temperatures,
so we could see higher natural gas prices later in the summer," he added.
The front-month also remained in overbought territory with a relative strength index (RSI) over 70 for a eighth
day in a row, further adding pressure to prices.
Data provider Refinitiv said gas output in the Lower 48 U.S. states fell to an average of 90.4 billion cubic
feet per day (bcfd) so far in July due mostly to pipeline problems in West Virginia. That compares with an average
of 92.2 bcfd in June and an all-time high of 95.4 bcfd in November 2019.
Refinitiv projected average gas demand, including exports, would slip from 93.3 bcfd in the prior week to 89.3
bcfd this week as milder weather cuts air conditioning use, before rising to 93 bcfd in the following week.
The amount of gas flowing to U.S. liquefied natural gas (LNG) export plants averaged 11 bcfd so far in July, up
from 10.1 bcfd in June but still below the record 11.5 bcfd in April.
With European TRNLTTFMc1 and Asian JKMc1 gas both trading over $12 per mmBtu, analysts said LNG exports from
the United States would remain high. The Title Transfer Facility (TTF) in the Netherlands, the European gas
benchmark, was near its highest since October 2008.
U.S. pipeline exports to Mexico averaged 6.3 bcfd so far in July, down from a record 6.7 bcfd in June.
Week ended Week ended July 2 Year ago July Five-year
July 9 (Actual) 2 average July
(Forecast) 2
U.S. natgas storage (bcf): 48 76 57 63
Global Gas Benchmark Futures ($ per Current Day Prior Day This Month Prior Year Five Year
mmBtu) Last Year Average 2020 Average
(2016-2020)
Henry Hub NGc1 3.64 3.70 1.76 2.13 2.66
Title Transfer Facility (TTF) 11.95 12.70 1.79 3.24 5.19
TRNLTTFMc1
Japan Korea Marker (JKM) JKMc1 12.90 13.12 2.39 4.22 6.49
Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year Norm 30-Year Norm
U.S. GFS HDDs 1 2 2 3 4
U.S. GFS CDDs 231 215 232 197 200
U.S. GFS TDDs 232 217 234 200 204
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Week Next Week This Week Five-Year
Last Year Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 91.2 90.9 91.1 88.5 81.1
U.S. Imports from Canada 7.0 6.9 6.9 7.4 8.2
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2
Total U.S. Supply 98.2 97.8 98 95.9 89.5
U.S. Demand (bcfd)
U.S. Exports to Canada 2.4 2.3 2.4 2.4 2.2
U.S. Exports to Mexico 6.4 6.4 6.6 5.6 4.7
U.S. LNG Exports 11.2 11.0 11.1 3.1 2.7
U.S. Commercial 4.3 4.3 4.3 4.4 4.4
U.S. Residential 3.5 3.4 3.5 3.5 3.5
U.S. Power Plant 38.3 35.4 38.1 43.3 39.2
U.S. Industrial 20.7 20.7 20.8 21.4 20.6
U.S. Plant Fuel 4.5 4.5 4.5 4.5 4.5
U.S. Pipe Distribution 2.0 1.9 1.9 1.9 2.0
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 73.5 70.0 72.9 79.1 74.3
Total U.S. Demand 93.3 89.3 93.0 90.2 83.9
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 3.67 3.76
Transco Z6 New York NG-CG-NY-SNL 2.65 2.90
PG&E Citygate NG-CG-PGE-SNL 4.31 4.74
Dominion South NG-PCN-APP-SNL 2.73 2.68
Chicago Citygate NG-CG-CH-SNL 3.41 3.46
Algonquin Citygate NG-CG-BS-SNL 2.90 2.77
SoCal Citygate NG-SCL-CGT-SNL 4.25 4.52
Waha Hub NG-WAH-WTX-SNL 3.40 3.46
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 25.74 34.00
PJM West EL-PK-PJMW-SNL 27.50 26.25
Ercot North EL-PK-ERTN-SNL 33.75 44.25
Mid C EL-PK-MIDC-SNL 92.50 56.00
Palo Verde EL-PK-PLVD-SNL 63.25 49.75
SP-15 EL-PK-SP15-SNL 64.75 51.5
(Reporting by Nakul Iyer and Bharat Gautam in Bengaluru; Editing by David Gregorio and Sonya Hepinstall)
((nakul.iyer@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 0417; Reuters Messaging:
nakul.iyer.thomsonreuters.com@reuters.net))
((For Refinitiv type ENERGY in Eikon search bar and then go to the GAS dropdown and the NORTH AMERICA dropdown or see: cpurl://apps.cp./cms/?pageid=usa-gas
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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 ))