US natgas climbs as hot weather outlook boosts power demand prospects
07/06/2023 15:20
June 7 (Reuters) - U.S. natural gas futures climbed more than 2% to a one-week high on Wednesday, as forecasts for warmer
weather bolstered the demand outlook for the fuel to cool homes and businesses.
Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange traded 5.6 cents higher, or 2.5%, to $2.32
per million British thermal units at 09:43 a.m. EDT.
Prices were rising "on a continued evolution of the weather outlooks for increasing gas demand from the power sector over the
next three weeks," said Gary Cunningham, director of market research at Tradition Energy.
Data provider Refinitiv forecast the number of cooling degree days (CDDs) in the coming two weeks to rise to 164, from the 153
CDDs forecast a day earlier, and above the 30-year normal of 147.
CDDs measure the number of degrees a day's average temperature is above 65 Fahrenheit (18 Celsius) and provide a snapshot into
likely demand for cooling.
Refinitiv estimated natural gas consumption by the U.S. power sector to jump to 37.6 billion cubic feet per day (bcfd) this
week from 31.8 bcfd last week, driving overall demand this week to 95.7 bcfd from 90.9 bcfd.
Higher demand from power generators to produce electricity amid rising air conditioning use reduces the fuel available to go
into storage for the peak winter heating season. That helps boost prices.
"The fundamentals have us probably capped well under $2.40 on the July (contract) until something significant happens like a
return of the LNG terminals which are currently down for maintenance," Cunningham said.
Gas flows to the seven big U.S. LNG export plants fell to an average of 12.0 bcfd so far in June, down from 13.0 bcfd in May.
That is well below the monthly record of 14.0 bcfd in April due to maintenance at several facilities, including Cheniere Energy
Inc's LNG.A Sabine Pass in Louisiana.
Production, meanwhile, was seen staying largely stagnant at 102.2 bcfd this week from 103 bcfd last week, according to
Refinitiv data, before edging up to 102.6 bcfd next week.
Traders also awaited the U.S. Energy Information Administration's weekly gas storage report at 10:30 a.m. EDT (1430 GMT) on
Thursday.
Week ended Week ended Year ago Five-year
Jun 2 May 26 Jun 2 average
(Forecast) (Actual) Jun 2
U.S. weekly natgas storage change (bcf): 113 110 99 100
U.S. total natgas in storage (bcf): 2,559 2,446 1,988 2,197
U.S. total storage versus 5-year average 16.5% 16.6%
Global Gas Benchmark Futures ($ per mmBtu) Current Prior Day This Month Prior Year Five Year
Day Last Year Average Average
2022 (2018-2022)
Henry Hub NGc1 7.60 6.54 3.60
2.26 2.22
Title Transfer Facility (TTF) TRNLTTFMc1 33.44 40.50 14.39
8.22 8.46
Japan Korea Marker (JKM) JKMc1 29.72 34.11 14.31
9.21 9.27
Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast Current Prior Day Prior Year 10-Year 30-Year
Day Norm Norm
U.S. GFS HDDs
10 11 10 13 17
U.S. GFS CDDs
164 153 183 155 147
U.S. GFS TDDs
174 164 193 168 164
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 103.0 97.5 89.8
102.2 102.6
U.S. Imports from Canada 6.8 8.7 7.9
7.0 6.9
U.S. LNG Imports 0.0 0.0 0.1
0.0 0.0
Total U.S. Supply 109.8 106.2 97.8
109.2 109.4
U.S. Demand (bcfd)
U.S. Exports to Canada 2.5 2.5 2.3
2.2 2.2
U.S. Exports to Mexico 6.7 6.2 5.5
7.3 6.3
U.S. LNG Exports 13.3 12.0 6.0
11.9 12.5
U.S. Commercial 4.5 4.5 4.7
4.5 4.4
U.S. Residential 3.9 3.7 4.3
3.8 3.7
U.S. Power Plant 31.8 33.8 34.8
37.6 37.1
U.S. Industrial 21.1 20.7 21.1
21.2 21.2
U.S. Plant Fuel 5.1 5.1 5.1
5.0 5.1
U.S. Pipe Distribution 1.8 1.8 1.8
2.0 2.0
U.S. Vehicle Fuel 0.1 0.1 0.1
0.1 0.1
Total U.S. Consumption 68.4 69.7 71.9
74.3 73.6
Total U.S. Demand 90.9 90.4 85.7
95.7 94.5
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Jun 9 Jun 2 May 26 May 19 May 12
Wind 10 9 8 12
5
Solar 5 5 4 5
5
Hydro 8 9 9 9
7
Other 2 2 2 2
2
Petroleum 0 0 0 0
0
Natural Gas 40 40 42 40
44
Coal 15 15 15 14
17
Nuclear 20 20 19 19
20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Prior Day
Day
Henry Hub NG-W-HH-SNL
1.95 1.92
Transco Z6 New York NG-CG-NY-SNL
1.43 1.47
PG&E Citygate NG-CG-PGE-SNL
3.44 3.48
Eastern Gas (old Dominion South) NG-PCN-APP-SNL
1.42 1.41
Chicago Citygate NG-CG-CH-SNL
1.86 1.88
Algonquin Citygate NG-CG-BS-SNL
1.74 1.65
SoCal Citygate NG-SCL-CGT-SNL
2.89 2.79
Waha Hub NG-WAH-WTX-SNL
1.86 1.91
AECO NG-ASH-ALB-SNL
2.03 2.21
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Prior Day
Day
New England EL-PK-NPMS-SNL
25.50 27.25
PJM West EL-PK-PJMW-SNL
29.00 38.25
Ercot North EL-PK-ERTN-SNL
40.75 31.50
Mid C EL-PK-MIDC-SNL
75.00 84.67
Palo Verde EL-PK-PLVD-SNL
31.50 32.25
SP-15 EL-PK-SP15-SNL
35.50 34.50
(Reporting by Deep Vakil in Bengaluru; Editing by Sriraj Kalluvila)
((DeepKaushik.Vakil@thomsonreuters.com;))
((For Refinitiv type ENERGY in nEiko search bar and then go to the GAS drop down and the NORTH AMERICA drop down or see: cpurl://apps.cp./cms/?pageid=usages
For Interactive Map, type 'Interactive Map' in the box at upper left of the Reuters nEiko terminal
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SOL U.S. gas prices, see: 0#SNL-NG
For next-day SOL 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: USGS
For the U.S. power speed guide, see: EMPOWER
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