US natgas prices jump 5% to four-week high on hotter forecasts
Adds latest prices
By Scott DiSavino
Aug 19 (Reuters) -U.S. natural gas futures jumped about 5% to a four-week high on Monday on a decline in output so far this month andforecasts for hotter weather next week than previously expected that should boost the amount of gas power generators burn to keep air conditioners humming.
Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange rose 11.2 cents, or 5.3%, to settle at $2.235 per million British thermal units (mmBtu), their highest close since July 22.
That price increase came even though there was still about 13% more gas in storage than is normal for this time of year. EIA/GAS NGAS/POLL
Storage builds, including last week's rare August withdrawal, have been smaller than normal in 13 of the past 14 weeks because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March.
The storage decline during the week ended Aug. 9 was the first weekly withdrawal in August since 2006.
Higher prices in April and May prompted some drillers, including EQT EQT.N and Chesapeake Energy CHK.O, to start boosting output again. But after prices dropped 22% in July, some analysts said producers could keep their drilling activities reduced for longer.
EQT is the nation's biggest gas producer and Chesapeake is on track to become the biggest after its planned merger with Southwestern Energy SWN.N.
But with gas futures up about 9% so far in August, speculators last week boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for the third time in four weeks to their highest since July, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the U.S. Lower 48 states slid to an average of 102.4 billion cubic feet per day (bcfd) so far in August, down from 103.4 bcfd in July. That compares with a monthly record high of 105.5 bcfd in December 2023.
Meteorologists forecast weather across the country would remain mostly near normal through Aug. 23 before turning hotter than normal from Aug. 24-Sept. 3.
With more heat coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 104.0 bcfd this week to 105.5 bcfd next week. The forecast for this week was lower than LSEG's outlook on Friday, while its forecast for next week was higher.
Gas flows to the seven big U.S. LNG export plants rose to 12.8 bcfd so far in August, up from 11.9 bcfd in July when Freeport shut for nine days for Hurricane Beryl. That compares with a monthly record high of 14.7 bcfd in December 2023.
The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's invasion of Ukraine.
Gas prices were trading around $13 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and at an eight-month high near $15at the Japan Korea Marker (JKM) benchmark in Asia JKMc1. NG/EU
Week ended Aug 16 Forecast | Week ended Aug 9 Actual | Year ago Aug 16 | Five-year average Aug 16 | ||
U.S. weekly natgas storage change (bcf): | +33 | -6 | +23 | +41 | |
U.S. total natgas in storage (bcf): | 3,297 | 3,264 | 3,078 | 2,930 | |
U.S. total storage versus 5-year average | 12.5% | 13.0% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.15 | 2.12 | 2.65 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 12.96 | 12.70 | 11.21 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 14.52 | 12.78 | 12.43 | 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 | 5 | 5 | 3 | 6 | 8 |
U.S. GFS CDDs | 204 | 223 | 211 | 186 | 171 |
U.S. GFS TDDs | 209 | 228 | 214 | 192 | 179 |
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 | 101.9 | 101.8 | 102.1 | 103.6 | 96.3 |
U.S. Imports from Canada | 7.7 | 7.8 | 7.7 | N/A | 7.3 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 109.5 | 109.7 | 109.9 | N/A | 103.7 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.6 | 1.6 | 1.6 | N/A | 2.3 |
U.S. Exports to Mexico | 7.3 | 7.1 | 7.2 | N/A | 6.1 |
U.S. LNG Exports | 12.7 | 12.9 | 12.9 | 11.8 | 7.7 |
U.S. Commercial | 4.5 | 4.5 | 4.5 | 4.5 | 4.5 |
U.S. Residential | 3.7 | 3.7 | 3.7 | 3.6 | 3.4 |
U.S. Power Plant | 43.8 | 44.9 | 46.3 | 45.3 | 43.0 |
U.S. Industrial | 21.8 | 21.9 | 21.9 | 21.5 | 21.7 |
U.S. Plant Fuel | 5.0 | 5.0 | 5.0 | 5.1 | 5.1 |
U.S. Pipe Distribution | 2.2 | 2.2 | 2.2 | 2.2 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 81.2 | 82.3 | 83.9 | 82.3 | 80.0 |
Total U.S. Demand | 102.8 | 104.0 | 105.5 | N/A | 96.1 |
N/A is Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam | Current Day % of Normal Forecast | Prior Day % of Normal Forecast | 2023 % of Normal Actual | 2022 % of Normal Actual | 2021 % of Normal Actual |
Apr-Sep | 74 | 74 | 83 | 107 | 81 |
Jan-Jul | 76 | 76 | 77 | 102 | 79 |
Oct-Sep | 77 | 77 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Aug 23 | Week ended Aug 16 | 2023 | 2022 | 2021 | |
Wind | 7 | 8 | 10 | 11 | 10 |
Solar | 6 | 6 | 4 | 3 | 3 |
Hydro | 5 | 6 | 6 | 6 | 7 |
Other | 1 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 46 | 45 | 41 | 38 | 37 |
Coal | 17 | 17 | 17 | 21 | 23 |
Nuclear | 18 | 17 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.01 | 2.19 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.50 | 1.74 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.60 | 2.73 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.48 | 1.64 | |||
Chicago Citygate NG-CG-CH-SNL | 1.76 | 1.85 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.60 | 1.78 | |||
SoCal Citygate NG-SCL-CGT-SNL | 1.75 | 1.97 | |||
Waha Hub NG-WAH-WTX-SNL | 1.59 | -1.21 | |||
AECO NG-ASH-ALB-SNL | 0.43 | 0.57 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 32.25 | 38.50 | |||
PJM West EL-PK-PJMW-SNL | 36.00 | 42.50 | |||
Ercot North EL-PK-ERTN-SNL | 39.50 | 55.00 | |||
Mid C EL-PK-MIDC-SNL | 45.00 | 39.25 | |||
Palo Verde EL-PK-PLVD-SNL | 29.25 | 36.00 | |||
SP-15 EL-PK-SP15-SNL | 27.50 | 34.75 |
Reporting by Scott DiSavino; editing by Jonathan Oatis
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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