US natgas prices slide 3% on rising output, less heat forecast for next week
By Scott DiSavino
July 31 (Reuters) -U.S. natural gas futures slid about 3% on Wednesday on rising output and forecasts for less hot weather and lower gas demand next week than previously expected.
That price decline came despite forecasts for record-breaking heat later this week that could boost the amount of gas power generators burn to an all-time high.
Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange fell 5.4 cents, or 2.5%, to $2.072 per million British thermal units (mmBtu) at 9:17 a.m. EDT (1317 GMT).
For the month, the contract was down about 20% after gaining about 48% during the prior three months.
In the spot market, gas prices at the Waha hub NG-WAH-WTX-SNL in the West Texas Permian Shale turned negative for a third time in July, even as a record-breaking heat wave could boost U.S. power demand to an all-time high as homes and businesses crank up their air conditioners.
In the Pennsylvania-New Jersey-Maryland region, meanwhile, next-day power at the PJM West hub EL-PK-PJMW-SNL fell to $14 per megawatt hour, its lowest since April 2021.
Analysts said higher gas use by power generators could cause utilities to take the unusual step of pulling gas out of storage during the second week of August. That would be the first weekly storage withdrawal in August since 2006.
There was currently about 17% more gas in storage than normal for this time of year. EIA/GAS NGAS/POLL
Storage builds have been mostly smaller than usual in recent weeks, because several producers cut output earlier this year after futures prices dropped to 3-1/2-year lows in February and March.
Higher prices in April and May, however, prompted some drillers, including EQT EQT.N and Chesapeake Energy CHK.O, to slowly boost output.
But with prices down about 20% so far in July, some analysts think producers could decide to keep their drilling activities on hold for longer.
In other news, the U.S. National Hurricane Center said a tropical disturbance in the Atlantic Ocean has a 60% chance of strengthening into a cyclone that could hit the U.S. East Coast somewhere between Florida and North Carolina over the next seven days.
Analysts said an East Coast storm could reduce gas demand by cutting power use through outages and cooler weather.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 states rose to an average of 102.5 billion cubic feet per day (bcfd) so far in July, up from 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May. U.S. output hit a monthly record of 105.5 bcfd in December 2023.
Meteorologists forecast temperatures across the Lower 48 states will average 83.5 degrees Fahrenheit (28.6 Celsius) on Aug. 1 and 83.9 F on Aug. 2, according to LSEG data.
That would top the daily record high average temperature of 83.0 F set on July 20, 2022, when power demand peaked at an all-time high of 742,600 megawatts, LSEG and federal energy data showed.
To keep air conditioners humming during that record heat, LSEG forecast power generators would burn about 54.8 bcfd of gas on Aug. 2, which would top the all-time high of 54.1 bcfd reached on July 9 when generators had to burn more gas due to a lack of wind power.
But the amount of wind power was on track to rise from 4% last week to around 10% this week.
With more heat coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.3 bcfd this week to 110.7 bcfd next week. The forecast for next week was lower than LSEG's outlook on Tuesday.
Week ended July 26 Forecast | Week ended July 19 Actual | Year ago July 26 | Five-year average July 26 | ||
U.S. weekly natgas storage change (bcf): | +39 | +22 | +15 | +33 | |
U.S. total natgas in storage (bcf): | 3,270 | 3,231 | 2,997 | 2,808 | |
U.S. total storage versus 5-year average | 16.5% | 16.4% | |||
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 | 2.14 | 2.13 | 2.64 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 11.08 | 10.94 | 9.58 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 12.48 | 12.45 | 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 | 3 | 3 | 1 | 2 | 3 |
U.S. GFS CDDs | 252 | 262 | 229 | 207 | 197 |
U.S. GFS TDDs | 255 | 265 | 230 | 209 | 200 |
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 | 102.5 | 102.8 | 102.9 | 102.3 | 95.5 |
U.S. Imports from Canada | 7.7 | 8.3 | 7.7 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 110.3 | 111.1 | 110.6 | N/A | 112.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.7 | 1.6 | 1.6 | N/A | 2.3 |
U.S. Exports to Mexico | 7.3 | 7.1 | 7.1 | N/A | 6.1 |
U.S. LNG Exports | 11.8 | 13.0 | 13.0 | 12.6 | 8.6 |
U.S. Commercial | 4.4 | 4.4 | 4.4 | 4.4 | 4.5 |
U.S. Residential | 3.5 | 3.6 | 3.6 | 3.5 | 3.6 |
U.S. Power Plant | 47.9 | 46.3 | 51.6 | 48.3 | 43.3 |
U.S. Industrial | 21.7 | 21.7 | 21.7 | 21.3 | 21.3 |
U.S. Plant Fuel | 5.1 | 5.1 | 5.1 | 5.0 | 4.9 |
U.S. Pipe Distribution | 2.3 | 2.2 | 2.4 | 2.2 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 84.9 | 83.5 | 88.9 | 84.8 | 79.9 |
Total U.S. Demand | 105.8 | 105.3 | 110.7 | 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 | 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 2 | Week ended Jul 26 | 2023 | 2022 | 2021 | |
Wind | 10 | 4 | 10 | 11 | 10 |
Solar | 5 | 5 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 1 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 44 | 48 | 41 | 38 | 37 |
Coal | 16 | 18 | 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 | 1.81 | 1.90 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.57 | 1.48 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.14 | 2.81 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.37 | 1.31 | |||
Chicago Citygate NG-CG-CH-SNL | 1.84 | 1.73 | |||
Algonquin Citygate NG-CG-BS-SNL | 2.35 | 1.92 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.03 | 2.09 | |||
Waha Hub NG-WAH-WTX-SNL | -1.16 | 1.32 | |||
AECO NG-ASH-ALB-SNL | 0.62 | 0.68 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 46.50 | 44.50 | |||
PJM West EL-PK-PJMW-SNL | 14.00 | 48.50 | |||
Ercot North EL-PK-ERTN-SNL | 26.25 | 24.50 | |||
Mid C EL-PK-MIDC-SNL | 67.00 | 47.00 | |||
Palo Verde EL-PK-PLVD-SNL | 44.00 | 31.25 | |||
SP-15 EL-PK-SP15-SNL | 41.50 | 30.25 |
Reporting by Scott DiSavino; Editing by David Holmes
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
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.