US natgas gains about 3% on higher demand view, output cut
Adds latest price
Oct 3 (Reuters) -U.S. natural gas futures rose nearly 3% on Thursday, supported by forecasts for higher demand over the next week than previously anticipated, a drop in output and a federal report showing a slightly smaller-than-expected weekly storage build last week.
Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange rose 8.4 cents, or 2.9%, to settle at $2.97 per million British thermal units (mmBtu).
The U.S. Energy Information Administration (EIA) said utilities added 55 billion cubic feet (bcf) of gas into storage in the week ended Sept. 27.
That was below the build of 57 bcf that analysts had forecast in a Reuters poll and compares with an injection of 87 bcf during the same week a year ago and a five-year (2019-2023) average increase of 98 bcf for this time of year. EIA/GAS NGAS/POLL
"The storage injection was within the bracketed range, slightly under, which should have been supportive, but I think the market had priced in sort of a more dramatic event," said Gary Cunningham, director of market research at Tradition Energy, adding that the report was basically a non-event.
Even though storage injections have been lower than usual in 19 of the past 20 weeks, the amount of gas in inventory was still about 6% above normal levels for this time of year due to low heating demand during the mild winter of 2023-2024.
Financial firm LSEG estimated 141 total degree days (TDDs) over the next two weeks, higher than the 136 estimated on Wednesday.
LSEG estimated average gas demand in the Lower 48, including exports, will rise from 95.3 billion cubic feet (bcfd) this week to 95.7 bcfd next week.
One factor that has supported prices in recent weeks - the front-month has gained about 50% since late August - is a drop in the amount of fuel going into storage for the 2024-2025 winter heating season.
Storage injections in July, August and likely in September were at record lows, according to federal energy data going back to 1997.
That's because many producers reduced their drilling activities 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. They have remained relatively low since that time.
One factor that has weighed on gas prices in recent days was the reduction in the amount that gas power generators need to burn, with about a million homes and businesses still without power in the U.S. Southeast and Midwest after Hurricane Helene battered the region late last week.
"The demand destruction caused by the catastrophic path of Helene will continue to overhang the market for a few weeks," Cunningham said.
Financial firm LSEG said gas output in the Lower 48 U.S. states has fallen to an average of 101.0 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.
Meanwhile, Dutch and British wholesale gas prices eased on Thursday morning but remain near their highest levels in a month as concerns persist over disruption to gas production in the Middle East as conflict in the region intensifies. NG/EU
Global gas demand is forecast to rise by more than 2.5% in 2024, with similar growth expected in 2025, largely supported by Asia, which alone is expected to account for more than half of incremental gas demand, the International Energy Agency (IEA) said in a report.
Week ended Sep 27 Actual | Week ended Sep 20 Actual | Year ago Sep 27 | Five-year average Sep 27 | ||
U.S. weekly natgas storage change (bcf): | +55 | +47 | +87 | +98 | |
U.S. total natgas in storage (bcf): | 3,547 | 3,492 | 3,420 | 3,357 | |
U.S. total storage versus 5-year average | 5.7% | 7.1% | |||
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 | 2.95 | 2.95 | 3.15 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 12.52 | 12.61 | 14.55 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 13.09 | 13.18 | 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 | 57 | 59 | 94 | 92 | 102 |
U.S. GFS CDDs | 84 | 77 | 52 | 65 | 57 |
U.S. GFS TDDs | 141 | 136 | 146 | 157 | 159 |
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 | 101.8 | 101.6 | 101.6 | 102.3 | 96.8 |
U.S. Imports from Canada | 7.9 | 7.6 | 7.6 | N/A | 7.1 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 109.7 | 109.2 | 109.2 | N/A | 103.9 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.9 | 2.0 | 2.0 | N/A | 2.3 |
U.S. Exports to Mexico | 6.2 | 6.4 | 6.6 | N/A | 5.9 |
U.S. LNG Exports | 12.3 | 12.0 | 12.7 | 12.7 | 10.0 |
U.S. Commercial | 4.8 | 4.9 | 5.2 | 5.0 | 6.9 |
U.S. Residential | 4.0 | 4.1 | 4.6 | 4.2 | 7.3 |
U.S. Power Plant | 40.2 | 36.8 | 35.4 | 35.4 | 30.9 |
U.S. Industrial | 21.9 | 21.8 | 22.0 | 21.7 | 22.3 |
U.S. Plant Fuel | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 |
U.S. Pipe Distribution | 2.1 | 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 | 78.1 | 74.8 | 74.3 | 73.4 | 74.5 |
Total U.S. Demand | 98.5 | 95.3 | 95.7 | 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 | 92 | 90 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Oct 4 | Week ended Sep 27 | 2023 | 2022 | 2021 | |
Wind | 8 | 7 | 10 | 11 | 10 |
Solar | 5 | 5 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 2 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 44 | 46 | 41 | 38 | 37 |
Coal | 16 | 18 | 17 | 21 | 23 |
Nuclear | 19 | 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 | 2.77 | 2.67 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.43 | 1.38 | |||
PG&E Citygate NG-CG-PGE-SNL | 4.25 | 4.14 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.45 | 1.35 | |||
Chicago Citygate NG-CG-CH-SNL | 2.54 | 2.47 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.62 | 1.71 | |||
SoCal Citygate NG-SCL-CGT-SNL | 3.80 | 3.25 | |||
Waha Hub NG-WAH-WTX-SNL | 1.65 | 1.08 | |||
AECO NG-ASH-ALB-SNL | 0.37 | 0.28 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 33.25 | 34.50 | |||
PJM West EL-PK-PJMW-SNL | 42.75 | 40.50 | |||
Ercot North EL-PK-ERTN-SNL | 31.50 | 30.75 | |||
Mid C EL-PK-MIDC-SNL | 68.25 | 50.75 | |||
Palo Verde EL-PK-PLVD-SNL | 63.50 | 57.25 | |||
SP-15 EL-PK-SP15-SNL | 61.50 | 54.50 |
Reporting by Anushree Mukherjee and Swati Verma in Bengaluru, additional reporting by Anmol Choubey; Editing by Sharon Singleton, Paul Simao and David Gregorio
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
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