US natgas prices fall 4% to 9-week low on forecasts for less heat, demand
By Scott DiSavino
July 15 (Reuters) -U.S. natural gas futures fell about 4% to a nine-week low on Monday on forecasts for less hot weather and lower demand over the next two weeks than previously expected.
Traders also noted prices were depressed by rising output, the tremendous oversupply of gas still in storage and the slow return of the Freeport LNG export plant in Texas after shutting ahead of Hurricane Beryl.
Analysts said there was currently about 18% more gas in storage than is normal for this time of year. EIA/GAS NGAS/POLL
Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 9.8 cents, or 4.2%, to $2.231 per million British thermal units (mmBtu) by 10:22 a.m. EDT (1422 GMT), putting the contract on track for its lowest close since May 8.
That price drop also pushed the front-month back into technically oversold territory for the seventh time in the last nine days.
Speculators last week cut their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for a third week in a row to their lowest since early May, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report.
Even though the November-March heating season is still months away, the market already seems to be giving up on extreme cold this winter with the futures for March trading at a record low premium to April NGH25-J25 of just 19 cents per mmBtu.
March is the last month of the winter storage withdrawal season and April is the first month of the summer storage injection season. Since gas is a primarily a winter heating fuel, traders have said that summer prices should never trade above winter.
The industry calls the March-April spread the "widow maker" because rapid price moves on changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006.
In other news, Saturday and Sunday were the hottest days so far this year and Monday and Tuesday are forecast to be even hotter, according to meteorologists.
That heat will likely force power generators to continue burning lots of gas to produce electricity to keep air conditioners humming. Those power generators burned a record 54.1 billion cubic feet per day (bcfd) of gas on July 9, according to LSEG data.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 102.3 bcfd so far in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May.
U.S. output hit a monthly record high of 105.5 bcfd in December 2023.
Several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March. But higher prices in April, May and June prompted some drillers, including EQT EQT.N and Chesapeake Energy CHK.O, to return to the well pad.
Meteorologists projected weather across the Lower 48 states would remain mostly hotter than normal through at least July 30, but for some near-normal days from July 18-22.
With less hot weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 106.3 bcfd to 103.8 bcfd next week. Those forecasts were lower than LSEG's outlook on Friday.
Gas flows to the seven big U.S. LNG export plants fell to 11.8 bcfd so far in July after Freeport LNG in Texas shut ahead of Hurricane Beryl on July 7, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.
Week ended July 12 Forecast | Week ended July 5 Actual | Year ago July 12 | Five-year average July 12 | ||
U.S. weekly natgas storage change (bcf): | +38 | +65 | +43 | +49 | |
U.S. total natgas in storage (bcf): | 3,237 | 3,199 | 2,959 | 2,744 | |
U.S. total storage versus 5-year average | 18.0% | 18.7% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.24 | 2.33 | 2.64 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 10.10 | 10.13 | 9.58 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 12.33 | 12.37 | 11.44 | 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 | 3 | 1 | 2 | 3 |
U.S. GFS CDDs | 238 | 257 | 243 | 213 | 205 |
U.S. GFS TDDs | 243 | 260 | 244 | 215 | 208 |
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 | 102.1 | 102.6 | 102.6 | 102.0 | 95.5 |
U.S. Imports from Canada | 8.2 | 8.2 | 7.5 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 110.3 | 110.5 | 110.1 | N/A | 112.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.4 | 1.3 | 1.6 | N/A | 2.3 |
U.S. Exports to Mexico | 6.8 | 6.8 | 6.8 | N/A | 6.1 |
U.S. LNG Exports | 11.7 | 11.6 | 12.0 | 12.7 | 8.6 |
U.S. Commercial | 4.3 | 4.3 | 4.4 | 4.3 | 4.5 |
U.S. Residential | 3.5 | 3.5 | 3.7 | 3.5 | 3.6 |
U.S. Power Plant | 49.5 | 49.7 | 46.3 | 48.0 | 43.3 |
U.S. Industrial | 21.6 | 21.6 | 21.6 | 21.3 | 21.3 |
U.S. Plant Fuel | 5.0 | 5.1 | 5.1 | 5.1 | 4.9 |
U.S. Pipe Distribution | 2.3 | 2.3 | 2.2 | 2.3 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 86.4 | 86.6 | 83.4 | 84.6 | 79.9 |
Total U.S. Demand | 106.3 | 106.3 | 103.8 | N/A | 96.9 |
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 | 75 | 83 | 107 | 81 |
Jan-Jul | 76 | 76 | 77 | 102 | 79 |
Oct-Sep | 78 | 78 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jul 19 | Week ended Jul 12 | 2023 | 2022 | 2021 | |
Wind | 8 | 5 | 10 | 11 | 10 |
Solar | 5 | 5 | 4 | 3 | 3 |
Hydro | 5 | 6 | 6 | 6 | 7 |
Other | 2 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 45 | 47 | 41 | 38 | 37 |
Coal | 18 | 18 | 17 | 21 | 23 |
Nuclear | 17 | 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 | 2.17 | 2.23 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.90 | 1.63 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.90 | 3.13 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.61 | 1.47 | |||
Chicago Citygate NG-CG-CH-SNL | 2.07 | 1.83 | |||
Algonquin Citygate NG-CG-BS-SNL | 2.12 | 1.78 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.10 | 2.59 | |||
Waha Hub NG-WAH-WTX-SNL | 0.37 | 0.81 | |||
AECO NG-ASH-ALB-SNL | 0.50 | 0.77 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 39.75 | 46.25 | |||
PJM West EL-PK-PJMW-SNL | 50.00 | 49.50 | |||
Ercot North EL-PK-ERTN-SNL | 22.75 | 25.25 | |||
Mid C EL-PK-MIDC-SNL | 30.00 | 84.00 | |||
Palo Verde EL-PK-PLVD-SNL | 42.25 | 80.00 | |||
SP-15 EL-PK-SP15-SNL | 39.75 | 63.50 |
Reporting by Scott DiSavino; Editing by Kirsten Donovan
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
Activos relacionados
Últimas noticias
Descargo de responsabilidades: Cada una de las entidades de XM Group proporciona un servicio de solo ejecución y acceso a nuestra plataforma de trading online, permitiendo a una persona ver o usar el contenido disponible en o a través del sitio web, sin intención de cambiarlo ni ampliarlo. Dicho acceso y uso están sujetos en todo momento a: (i) Términos y Condiciones; (ii) Advertencias de riesgo; y (iii) Descargo completo de responsabilidades. Por lo tanto, dicho contenido se proporciona exclusivamente como información general. En particular, por favor tenga en cuenta que, los contenidos de nuestra plataforma de trading online no son ni solicitud ni una oferta para entrar a realizar transacciones en los mercados financieros. Operar en cualquier mercado financiero implica un nivel de riesgo significativo para su capital.
Todo el material publicado en nuestra plataforma de trading online tiene únicamente fines educativos/informativos y no contiene –y no debe considerarse que contenga– asesoramiento ni recomendaciones financieras, tributarias o de inversión, ni un registro de nuestros precios de trading, ni una oferta ni solicitud de transacción con instrumentos financieros ni promociones financieras no solicitadas.
Cualquier contenido de terceros, así como el contenido preparado por XM, como por ejemplo opiniones, noticias, investigaciones, análisis, precios, otras informaciones o enlaces a sitios de terceros que figuran en este sitio web se proporcionan “tal cual”, como comentarios generales del mercado y no constituyen un asesoramiento en materia de inversión. En la medida en que cualquier contenido se interprete como investigación de inversión, usted debe tener en cuenta y aceptar que dicho contenido no fue concebido ni elaborado de acuerdo con los requisitos legales diseñados para promover la independencia en materia de investigación de inversiones y, por tanto, se considera como una comunicación comercial en virtud de las leyes y regulaciones pertinentes. Por favor, asegúrese de haber leído y comprendido nuestro Aviso sobre investigación de inversión no independiente y advertencia de riesgo en relación con la información anterior, al que se puede acceder aquí.