US natgas prices fall 3% to 2-week low on lower demand forecast
By Scott DiSavino
Oct 14 (Reuters) -U.S. natural gas futures dropped about 3% to two-week lows on Monday on forecasts for milder weather and less demand next week than previously expected.
Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange fell 7.3 cents, or 2.8%, to $2.559 per million British thermal units (mmBtu) at 8:48 a.m. EDT (1248 GMT), putting the contract on track for its lowest close since Sept. 24.
Even though the November-March heating season is still a couple of weeks away, the market seems to have given up on extreme cold that could cause prices to spike this winter with futures for March trading at a record low premium to April NGH25-J25 of just 11 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 primarily a winter heating fuel, traders have said summer prices should not 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.
One factor weighing on gas prices in recent weeks has been a reduction in the amount of gas power generators burned after Hurricanes Milton and Helene knocked out electric service to millions of homes and businesses.
There were still about 404,000 customers without power in Florida from Milton, which hit the state on Oct. 9, and 17,000 out in North Carolina from Helene, which hit Florida on Sept. 26 before moving inland.
In total, Milton caused around 3.4 million customers to lose power, while Helene caused roughly 6 million outages.
The U.S. National Hurricane Center, meanwhile, projected there was a 50% chance that a disturbance in the Atlantic Ocean would strengthen into a tropical cyclone over the next week as it moves toward Puerto Rico.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states slid to 101.4 billion cubic feet per day (bcfd) so far in October, down from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023.
That is because many producers reduced their drilling activities so far this year after average spot monthly prices at the U.S. Henry Hub NG-W-HH-SNL benchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then.
Meteorologists projected the weather in the Lower 48 states will switch from colder than normal from Oct. 14-17 to warmer than normal from Oct. 18-29.
With seasonally warmer weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 97.5 bcfd this week to 95.5 bcfd next week. The forecast for this week was higher than LSEG's outlook on Friday, while its forecast for next week was lower.
Berkshire Hathaway Energy's 0.8-bcfd Cove Point LNG export plant in Maryland returned to service after three weeks of maintenance over the weekend, boosting gas flows to the seven big U.S. LNG export plants to an average of 12.7 bcfd so far in October, the same as September.
That compares with a monthly record high of 14.7 bcfd in December 2023.
On a daily basis, feedgas to the LNG plants reached 13.8 bcfd on Oct. 12, the most since March 2024.
Week ended Oct 11 Forecast | Week ended Oct 4 Actual | Year ago Oct 11 | Five-year average Oct 11 | ||
U.S. weekly natgas storage change (bcf): | +68 | +82 | +93 | +89 | |
U.S. total natgas in storage (bcf): | 3,697 | 3,629 | 3,598 | 3,542 | |
U.S. total storage versus 5-year average | 4.4% | 5.1% | |||
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 | 2.59 | 2.63 | 3.15 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 12.79 | 12.71 | 14.55 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 13.08 | 13.08 | 16.30 | 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 | 133 | 112 | 106 | 137 | 154 |
U.S. GFS CDDs | 35 | 50 | 45 | 44 | 35 |
U.S. GFS TDDs | 168 | 162 | 151 | 181 | 189 |
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 | 101.3 | 101.8 | 101.8 | 103.7 | 96.8 |
U.S. Imports from Canada | 8.0 | 7.7 | 7.1 | N/A | 7.1 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 109.3 | 109.5 | 108.9 | N/A | 103.9 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.9 | 1.8 | 1.8 | N/A | 2.3 |
U.S. Exports to Mexico | 6.5 | 6.3 | 6.4 | N/A | 5.9 |
U.S. LNG Exports | 12.4 | 13.4 | 13.6 | 14.3 | 10.0 |
U.S. Commercial | 5.3 | 5.9 | 6.7 | 6.8 | 6.9 |
U.S. Residential | 4.8 | 8.0 | 7.8 | 7.8 | 7.3 |
U.S. Power Plant | 35.5 | 31.1 | 29.7 | 21.4 | 30.9 |
U.S. Industrial | 22.1 | 22.8 | 22.4 | 22.6 | 22.3 |
U.S. Plant Fuel | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 |
U.S. Pipe Distribution | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 74.8 | 75.9 | 73.7 | 65.7 | 74.5 |
Total U.S. Demand | 95.7 | 97.5 | 95.5 | N/A | 92.7 |
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 | 2023 % of Normal Actual | 2022 % of Normal Actual |
Apr-Sep | 94 | 93 | 74 | 83 | 107 |
Jan-Jul | 89 | 88 | 76 | 77 | 102 |
Oct-Sep | 90 | 89 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Oct 18 | Week ended Oct 11 | 2023 | 2022 | 2021 | |
Wind | 11 | 9 | 10 | 11 | 10 |
Solar | 5 | 6 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 2 | 2 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 40 | 44 | 41 | 38 | 37 |
Coal | 17 | 16 | 17 | 21 | 23 |
Nuclear | 20 | 18 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.31 | 2.26 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.56 | 1.46 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.92 | 4.26 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.22 | 1.39 | |||
Chicago Citygate NG-CG-CH-SNL | 2.14 | 2.15 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.56 | 1.63 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.34 | 2.99 | |||
Waha Hub NG-WAH-WTX-SNL | 0.28 | 0.28 | |||
AECO NG-ASH-ALB-SNL | 1.13 | 1.20 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 28.50 | 34.00 | |||
PJM West EL-PK-PJMW-SNL | 30.50 | 32.75 | |||
Ercot North EL-PK-ERTN-SNL | 35.95 | 25.75 | |||
Mid C EL-PK-MIDC-SNL | 48.00 | 64.25 | |||
Palo Verde EL-PK-PLVD-SNL | 25.50 | 44.00 | |||
SP-15 EL-PK-SP15-SNL | 22.25 | 41.00 |
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
Reporting by Scott DiSavino
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