US natural gas prices rise 1% to 8-week high on higher LNG feedgas, lower output
Adds closing prices
By Scott DiSavino
Sept 6 (Reuters) -U.S. natural gas futures edged up about 1% to an eight-week high on Friday as the amount of gas flowing to liquefied natural gas (LNG)export plants rises and producers continue to curtail output.
That small price gain occurred despite bearish forecasts for cooler weather over the next two weeks than previously expected, which shouldreduce the amount of gas power generators burn to keep air conditioners humming.
Another factor that has weighed on gas prices for much of this year is the tremendous oversupply of gas left in storage after a mild winter.
There is still about 10% more gas in storage than normal for this time of year even though injections have been smaller than usual in 16 of the last 17 weeks. EIA/GAS NGAS/POLL
Analysts said those small builds happened mostly because several producers cut output this year after spot prices at the U.S. Henry Hub benchmark NG-W-HH-SNL fell to a 25-year low in the spring and have remained relatively low since.
Front-month gas futures NGc1 for October delivery on the New York Mercantile Exchange rose 2.1 cents, or 0.9%, to settle at $2.275 per million British thermal units (mmBtu), theirhighest close since July 12 for a second day in a row.
For the week, the front-month was up about 7% after gaining about 5% last week.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states has slidto an average of 102.2 billion cubic feet per day (bcfd) so far in September, down from 103.2 bcfd in August.
On a daily basis, output was on track to drop by 2.1 bcfd over the last six days to a preliminary 11-week low of 101.7 bcfd on Friday. Analysts, however, noted that preliminary data was often revised later in the day.
Meteorologists forecast weather across the U.S. would remain mostly near normal through Sept. 9 before turning warmer than normal in the Sept. 10-21 period. Energy traders, however, noted that warmer-than-normal weather in mid-September would only average around 74 degrees Fahrenheit (23.3 degrees Celsius), down from an average of 79 F (26 C) in mid-August.
LSEG forecast average gas demand in the Lower 48, including exports, will fall from 102.5 bcfd this week to 100.5 bcfd for the next two weeks. The forecasts for this week and next were similar to LSEG's outlook on Thursday.
Gas flows to the seven big U.S. LNG export plants have risen to an average of 13.2 bcfd so far in September, up from 12.9 bcfd in August. That compares with a monthly record high of 14.7 bcfd in December 2023. On a daily basis, LNG feedgas was on track to reach a three-month high of 13.4 bcfd on Friday.
Looking ahead, Berkshire Hathaway Energy's 0.8-bcfd Cove Point LNG export plant in Maryland will likely be shutfor about three weeks of routine annual maintenance around Sept. 20, according to the plant's history and notices to customers.
The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices feed demand for more exports due in part to supply disruptions and sanctions linked to Russia's invasion of Ukraine.
Gas prices were trading around $12 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and $14 at the Japan Korea Marker (JKM) benchmark in Asia JKMc1. NG/EU
Week ended Sep 6 Forecast | Week ended Aug 30 Actual | Year ago Sep 6 | Five-year average Sep 6 | ||
U.S. weekly natgas storage change (bcf): | +49 | +13 | +50 | +67 | |
U.S. total natgas in storage (bcf): | 3,396 | 3,347 | 3,189 | 3,091 | |
U.S. total storage versus 5-year average | 9.9% | 10.7% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.26 | 2.25 | 2.70 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 12.11 | 11.75 | 11.44 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 13.82 | 13.79 | 13.92 | 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 | 16 | 12 | 9 | 16 | 28 |
U.S. GFS CDDs | 146 | 150 | 171 | 152 | 125 |
U.S. GFS TDDs | 162 | 162 | 180 | 168 | 153 |
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 | 103.2 | 102.7 | 102.2 | 104.1 | 96.5 |
U.S. Imports from Canada | 8.3 | 8.2 | 7.6 | N/A | 7.1 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 111.6 | 110.9 | 109.8 | N/A | 103.6 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.7 | 1.9 | 1.9 | N/A | 2.3 |
U.S. Exports to Mexico | 7.2 | 7.3 | 7.2 | N/A | 6.0 |
U.S. LNG Exports | 12.6 | 13.1 | 13.4 | 13.1 | 8.2 |
U.S. Commercial | 4.5 | 4.5 | 4.8 | 4.5 | 4.9 |
U.S. Residential | 3.7 | 3.6 | 4.1 | 3.6 | 3.9 |
U.S. Power Plant | 46.6 | 42.9 | 39.8 | 42.5 | 36.0 |
U.S. Industrial | 21.9 | 21.8 | 22.0 | 21.5 | 21.7 |
U.S. Plant Fuel | 5.1 | 5.1 | 5.0 | 5.1 | 5.1 |
U.S. Pipe Distribution | 2.2 | 2.1 | 2.1 | 2.2 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 84.2 | 80.2 | 78.0 | 79.5 | 80.0 |
Total U.S. Demand | 105.7 | 102.5 | 100.5 | N/A | 90.4 |
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 Sep 6 | Week ended Aug 30 | 2023 | 2022 | 2021 | |
Wind | 6 | 7 | 10 | 11 | 10 |
Solar | 5 | 5 | 4 | 3 | 3 |
Hydro | 5 | 55 | 6 | 6 | 7 |
Other | 1 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 48 | 47 | 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 | 2.02 | 2.05 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.54 | 1.57 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.60 | 2.63 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.53 | 1.52 | |||
Chicago Citygate NG-CG-CH-SNL | 1.78 | 1.84 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.80 | 1.85 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.05 | 2.09 | |||
Waha Hub NG-WAH-WTX-SNL | 0.48 | 0.40 | |||
AECO NG-ASH-ALB-SNL | 0.66 | 0.63 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 35.25 | 34.00 | |||
PJM West EL-PK-PJMW-SNL | 27.00 | 32.00 | |||
Ercot North EL-PK-ERTN-SNL | 18.50 | 25.25 | |||
Mid C EL-PK-MIDC-SNL | 98.80 | 289.50 | |||
Palo Verde EL-PK-PLVD-SNL | 105.25 | 160.50 | |||
SP-15 EL-PK-SP15-SNL | 89.00 | 150.25 |
Reporting by Scott DiSavino; editing by Jonathan Oatis and Paul Simao
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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