US natgas down 2% on lower flows to LNG export plants, mild weather
06/06/2023 14:45
June 6 (Reuters) - U.S. natural gas futures fell about 2% on Tuesday on lower gas flows to liquefied natural gas (LNG)
plants due to maintenance, forecasts for milder weather and less demand over the next two weeks than previously expected and a drop
in global gas prices.
That U.S. price decline came even as low amounts of wind power keeps forcing power generators to burn more gas to produce
electricity, a drop in U.S. daily output, rising exports to Mexico and forecasts for hot weather in mid- to late June.
The amount of U.S. power generated by wind so far this week dropped to just 5% of the total versus a recent high of 12% during
the week ended May 12, according to federal energy data. That boosted the amount of power generated by gas this week to 43%, up
from around 40% in recent weeks.
When power generators burn more gas to produce electricity to meet rising air conditioning use, there is less of the fuel
available to go into storage for the peak winter heating season. That helps boost prices.
Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 4.3 cents, or 1.9%, to $2.202 per
million British thermal units (mmBtu) at 8:57 a.m. EDT (1257 GMT).
With growing interest in energy trading in recent weeks, open interest in NYMEX gas futures rose to 1.389 million contracts on
Monday, the most since September 2021.
Around the world, gas futures remained volatile. Prices at the Dutch Title Transfer Facility (TTF) benchmark in Europe
TRNLTTFMc1 dropped about 15% on Tuesday to around $8 per mmBtu after soaring 25% on Monday. NG/EU
So far this year, gas prices at TTF and the Japan Korea Marker (JKM) JKMc1 benchmark in Asia have collapsed by more than 65%.
On Friday, gas at TTF was trading at a 25-month low of around $7 per mmBtu, while JKM held near a 24-month low near $9.
SUPPLY AND DEMAND
Data provider Refinitiv said average gas output in the U.S. Lower 48 states eased to 102.3 billion cubic feet per day (bcfd) so
far in June, down from a monthly record of 102.5 bcfd in May.
On a daily basis, however, output was on track to drop about 1.7 bcfd to a preliminary six-week low of 101.3 bcfd on Tuesday.
That would be the biggest daily output drop since January, but analysts noted preliminary data is often revised later in the day.
Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through June 14 before turning
hotter than normal from June 15-21.
Even with warmer weather coming, Refinitiv forecast U.S. gas demand, including exports, would ease from 95.4 bcfd this week,
when low wind power was seen forcing power generators to burn more gas, to 94.1 bcfd next week. Those demand forecasts were lower
than Refinitiv's outlook on Monday.
U.S. exports to Mexico rose to an average of 7.5 bcfd so far in June, up from 5.9 bcfd in May. That compares with a monthly
record high of 6.7 bcfd in June 2021.
Gas flows to the seven big U.S. LNG export plants fell to an average of 12.0 bcfd so far in June, down from 13.0 bcfd in May.
That is well below the monthly record of 14.0 bcfd in April due to maintenance at several facilities, including Cheniere Energy
Inc's LNG.A Sabine Pass in Louisiana.
Record flows in April were higher than the 13.8 bcfd of gas the seven big plants can turn into LNG since the facilities also
use some of the fuel to power equipment used to produce LNG.
Week ended Week ended Year ago Five-year
Jun 2 May 26 Jun 2 average
(Forecast) (Actual) Jun 2
U.S. weekly natgas storage change (bcf): 113 110 99 100
U.S. total natgas in storage (bcf): 2,559 2,446 1,988 2,197
U.S. total storage versus 5-year average 16.5% 16.6%
Global Gas Benchmark Futures ($ per mmBtu) Current Prior Day This Month Prior Year Five Year
Day Last Year Average Average
2022 (2018-2022)
Henry Hub NGc1 2.22 2.25 7.60 6.54 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 8.46 9.18 33.44 40.50 14.39
Japan Korea Marker (JKM) JKMc1 9.27 9.29 29.72 34.11 14.31
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 11 11 16 24 18
U.S. GFS CDDs 153 154 170 148 144
U.S. GFS TDDs 164 165 186 172 162
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 103.0 102.5 102.8 97.5 89.8
U.S. Imports from Canada 6.8 6.9 6.8 8.7 7.9
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 109.8 109.4 109.6 106.2 97.8
U.S. Demand (bcfd)
U.S. Exports to Canada 2.5 2.3 2.3 2.5 2.3
U.S. Exports to Mexico 6.7 7.1 6.3 6.2 5.5
U.S. LNG Exports 13.3 11.9 12.6 12.0 6.0
U.S. Commercial 4.5 4.5 4.4 4.5 4.7
U.S. Residential 3.9 3.9 3.7 3.7 4.3
U.S. Power Plant 31.8 37.3 36.4 33.8 34.8
U.S. Industrial 21.1 21.2 21.2 20.7 21.1
U.S. Plant Fuel 5.1 5.1 5.1 5.1 5.1
U.S. Pipe Distribution 1.8 2.0 1.9 1.8 1.8
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 68.4 74.1 73.0 69.7 71.9
Total U.S. Demand 90.9 95.4 94.1 90.4 85.7
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 5 10 9 8 12
Solar 5 5 5 4 5
Hydro 7 8 9 9 9
Other 2 2 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 43 40 40 42 40
Coal 17 15 15 15 14
Nuclear 20 20 20 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Prior Day
Day
Henry Hub NG-W-HH-SNL 1.92 1.74
Transco Z6 New York NG-CG-NY-SNL 1.47 1.23
PG&E Citygate NG-CG-PGE-SNL 3.48 2.51
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.41 1.29
Chicago Citygate NG-CG-CH-SNL 1.88 1.66
Algonquin Citygate NG-CG-BS-SNL 1.65 1.40
SoCal Citygate NG-SCL-CGT-SNL 2.79 2.00
Waha Hub NG-WAH-WTX-SNL 1.91 1.65
AECO NG-ASH-ALB-SNL 1.64 1.46
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Prior Day
Day
New England EL-PK-NPMS-SNL 27.25 25.00
PJM West EL-PK-PJMW-SNL 38.25 34.50
Ercot North EL-PK-ERTN-SNL 31.50 30.25
Mid C EL-PK-MIDC-SNL 84.67 59.38
Palo Verde EL-PK-PLVD-SNL 32.25 14.75
SP-15 EL-PK-SP15-SNL 34.50 16.25
(Reporting by Scott DiSavino; Editing by Andrea Ricci)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))
((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
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)
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NYMEX Henry Hub futures only 0#1CFTC023651
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