US natural gas up more than 3% to 1-week high as weather turns colder

Reuters

US natural gas up more than 3% to 1-week high as weather turns colder

Dec 9, 2024 at 8:13 pm GMT

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Updates for market close

Dec 9 (Reuters) -U.S. natural gas futures rose over 3% to more than a one-week high on Monday, helped by a shift in short-term forecasts to cooler weather that would lead to increased gas demand for heating.

Front-month gas futures NGc1 for January delivery on the New York Mercantile Exchange settled 10.6 cents up, or 3.4%, to $3.182 per million British thermal units (mmBtu) at 02:55 p.m. EST (1955 GMT).

"Weather outlook for later in the month shifted significantly colder for the northeastern U.S., a key region for natural gas demands. That shift added to potential withdrawal projections and is helping support a push to the higher end of the range near $3.30," said Gary Cunningham, director of market research at Tradition Energy.

The U.S. Energy Information Administration said utilities pulled 30 billion cubic feet (bcf) of gas out of storage during the week ended Nov. 29. Early estimates for the week ending Dec. 6 ranged from withdrawals of 49 bcf to 187 bcf, with an average decrease of 138 bcf. That compares with a withdrawal of 72 bcf during the same week last year and a five-year average decrease of 71 bcf. EIA/GASNGAS/POLL

"Much of this strength appears to represent another expected Arctic blast at about the middle of this week that will be prompting a larger-than-normal storage withdrawal next week that is apt to follow a sizable reduction in the surplus per this week's data," said Jim Ritterbusch of Ritterbusch and Associates in Florida.

"However, we are not expecting much upside follow-throughbeyond today's high because of another warm-up in the weather forecasts next week and possibly into the holiday period ... some production slippage and steady export activity may be adding to today's gains but don't appear sufficient to spur additional strength unless accompanied by disrupted output due to freeze-offs."

LSEG estimated 355 heating degree days over the next two weeks, lower than the forecast of 368 HDDs on Friday. It forecast average gas demand in the Lower 48, including exports, would drop from 130.5 bcfd this week to 126.7 bcfd next week.

The amount of gas flowing to the seven big operating U.S. LNG export plants has risen to an average of 14.2 bcfd so far in December, up from 13.6 bcfd in November. That compares with a monthly record high of 14.7 bcfd in December 2023.

Financial firm LSEG said average gas output in the Lower 48 U.S. states has risen to 102.7 billion cubic feet per day (bcfd) so far in December, up from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023.

"We are also seeing some support for prices from hedging by European buyers who see the regime change in Syria as additional risk to supplies from a regional unrest perspective," Cunningham added.

Syrian rebels seized Damascus on Sunday, forcing President Bashar al-Assad to flee to Russia, ending 13 years of civil war and more than 50 years of Assad family rule.

Dutch and British wholesale gas prices were down on Monday morning on a warmer weather outlook and with the market shrugging off the geopolitical developments in Syria. NG/EU

	Week ended Dec 6 Forecast	Week ended Nov 29 Actual	Year ago Dec 6	Five-year average Dec 6
U.S. weekly natgas storage change (bcf):	-138	-30	-72	-71
U.S. total natgas in storage (bcf):	3,799	3,937	3,680	3,582
U.S. total storage versus 5-year average	6.1%	7.8%


Global Gas Benchmark Futures ($ per mmBtu)	Current Day	Prior Day	This Month Last Year	Prior Year Average 2023	Five-Year Average (2018-2022)
Henry Hub NGc1	3.2	3.02	2.54	2.66	3.60
Title Transfer Facility (TTF) TRNLTTFMc1	14.75	14.32	11.55	13.04	14.39
Japan Korea Marker (JKM) JKMc1	15.08	15.06	14.03	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 Norm	30-Year Norm
U.S. GFS HDDs	355	368	320	384	400
U.S. GFS CDDs	2	2	3	5	4
U.S. GFS TDDs	357	370	323	389	404

LSEG U.S. Weekly GFS Supply and Demand Forecasts
	Prior Week	Current Week	Next Week	This Week Last Year	Five-Year (2019-2023) Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production	102.6	103.0	102.1	104.7	97.8
U.S. Imports from Canada	9.6	9.6	9.2	N/A	8.7
U.S. LNG Imports	0.0	0.0	0.0	0.0	0.2
Total U.S. Supply	112.2	112.6	111.4	N/A	106.7

U.S. Demand (bcfd)
U.S. Exports to Canada	2.7	3.0	2.9	N/A	3.4
U.S. Exports to Mexico	5.6	5.6	5.7	N/A	5.4
U.S. LNG Exports	14.2	14.3	14.7	14.4	10.8
U.S. Commercial	17.3	15.2	14.7	13.2	14.3
U.S. Residential	28.9	25.0	24.0	20.9	23.4
U.S. Power Plant	34.1	34.2	32.0	33.2	30.3
U.S. Industrial	26.0	25.1	24.9	24.3	25.1
U.S. Plant Fuel	5.1	5.1	5.0	5.1	5.2
U.S. Pipe Distribution	3.0	2.9	2.8	3.0	3.7
U.S. Vehicle Fuel	0.1	0.1	0.1	0.1	0.1
Total U.S. Consumption	114.6	107.6	103.5	99.8	102.1
Total U.S. Demand	137.2	130.5	126.7	N/A	121.7

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam	2025 Current Day % of Normal Forecast	2025 Prior Day % of Normal Forecast	2024 % of Normal Actual	2003 % of Normal Actual	2022 % of Normal Actual
Apr-Sep	88	91	74	83	107
Jan-Jul	85	87	76	77	102
Oct-Sep	86	88	77	76	103


U.S. weekly power generation percent by fuel - EIA
	Week ended Dec 13	Week ended Dec 6	2023	2022	2021
Wind	13	9	10	11	10
Solar	3	4	4	3	3
Hydro	5	5	6	6	7
Other	1	1	2	2	2
Petroleum	0	0	0	0	0
Natural Gas	40	42	41	38	37
Coal	18	20	17	21	23
Nuclear	20	19	19	19	20

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub	Current Day	Prior Day
Henry Hub NG-W-HH-SNL	2.83	2.95
Transco Z6 New York NG-CG-NY-SNL	2.68	3.87
PG&E Citygate NG-CG-PGE-SNL	3.40	3.53
Eastern Gas (old Dominion South) NG-PCN-APP-SNL	2.54	2.64
Chicago Citygate NG-CG-CH-SNL	2.58	2.78
Algonquin Citygate NG-CG-BS-SNL	6.92	14.19
SoCal Citygate NG-SCL-CGT-SNL	3.47	3.58
Waha Hub NG-WAH-WTX-SNL	2.19	2.74
AECO NG-ASH-ALB-SNL	1.69	1.26

SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day
New England EL-PK-NPMS-SNL	89.00	113.50
PJM West EL-PK-PJMW-SNL	41.00	59.00
Ercot North EL-PK-ERTN-SNL	42.75	54.00
Mid C EL-PK-MIDC-SNL	53.71	52.40
Palo Verde EL-PK-PLVD-SNL	31.75	40.00
SP-15 EL-PK-SP15-SNL	30.75	38.75

text_section_type="notes">For gas data on the LSEG terminal 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 LSEG 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