US natgas prices hold near 1-week high ahead of Labor Day weekend on rising LNG feedgas
By Scott DiSavino
Aug 30 (Reuters) -U.S. natural gas futures held near a one-week high on Friday ahead of the long U.S. Labor Day holiday weekend as a bullish rise in gas flows to liquefied natural gas (LNG) export plants offset bearish forecasts for slightly less heat over the next two weeks than previously expected.
LNG feedgas rose with the return to near full service of Freeport LNG's plant in Texas following an unexpected shutdown on Wednesday. Less heat means power generators will not have to burn as much gas to produce electricity to keep air conditioners humming.
Another factor that has weighed on gas prices for much of this year was the tremendous oversupply of fuel left in storage after a mild winter.
There was still about 12% more gas in storage than normal for this time of year even though injections have been smaller than usual in 15 of the past 16 weeks after extremely low prices in the spring prompted several producers to cut output. EIA/GAS NGAS/POLL
Front-month gas futures NGc1 for October delivery on the New York Mercantile Exchange remained unchanged at $2.136 per million British thermal units (mmBtu) at 9:13 a.m. EDT (1313 GMT), putting the contract on track for its highest close since Aug. 21 for a second day in a row.
For the week, the front-month was up about 5% after falling about 5% last week.
For the month, the contract was up about 5% after falling about 22% in July, the biggest monthly decline since January 2023.
In the spot market, pipeline constraints caused next-day gas prices at the Waha hub NG-WAH-WTX-SNL in the Permian Shale in West Texas to fall to an all-time low and average in negative territory for a record 32nd time this year.
Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six times in 2020 and once in 2023.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states slid to an average of 102.4 billion cubic feet per day (bcfd) so far in August, down from 103.4 bcfd in July.
Meteorologists forecast weather across the country would remain mostly hotter than normal through Sept. 14. Energy traders, however, noted that hot weather at the start of September would only average around 77 degrees F (25.0 Celsius), versus 83 F (28.3 C) at the start of August.
LSEG forecast average gas demand in the Lower 48, including exports, will fall from 105.9 bcfd this week to 103.0 bcfd next week and the week after. The forecast for next week was higher than LSEG's outlook on Thursday.
Gas flows to the seven big U.S. LNG export plants rose to an average of 12.8 bcfd so far in August, up from 11.9 bcfd in July. That compares with a monthly record high of 14.7 bcfd in December 2023.
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 $13 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and $14 at the Japan Korea Marker (JKM) benchmark in Asia JKMc1. NG/EU
Week ended Aug 30 Forecast | Week ended Aug 23 Actual | Year ago Aug 30 | Five-year average Aug 30 | ||
U.S. weekly natgas storage change (bcf): | +34 | +35 | +33 | +51 | |
U.S. total natgas in storage (bcf): | 3,378 | 3,334 | 3,139 | 3,024 | |
U.S. total storage versus 5-year average | 11.7% | 12.1% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.13 | 2.14 | 2.65 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 12.99 | 12.65 | 11.21 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 14.01 | 14.07 | 12.43 | 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 | 7 | 8 | 4 | 10 | 17 |
U.S. GFS CDDs | 168 | 171 | 201 | 170 | 144 |
U.S. GFS TDDs | 175 | 179 | 205 | 180 | 161 |
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 | 101.9 | 102.5 | 102.4 | 103.7 | 96.3 |
U.S. Imports from Canada | 7.8 | 8.3 | 7.9 | N/A | 7.3 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 109.6 | 110.8 | 110.3 | N/A | 103.7 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.7 | 1.7 | 1.7 | N/A | 2.3 |
U.S. Exports to Mexico | 7.1 | 7.3 | 7.3 | N/A | 6.1 |
U.S. LNG Exports | 13.0 | 12.6 | 12.9 | 12.5 | 7.7 |
U.S. Commercial | 4.5 | 4.5 | 4.5 | 4.5 | 4.5 |
U.S. Residential | 3.7 | 3.7 | 3.7 | 3.6 | 3.4 |
U.S. Power Plant | 43.1 | 46.7 | 43.7 | 46.0 | 43.0 |
U.S. Industrial | 21.9 | 21.9 | 21.8 | 21.6 | 21.7 |
U.S. Plant Fuel | 5.0 | 5.1 | 5.1 | 5.0 | 5.1 |
U.S. Pipe Distribution | 2.1 | 2.2 | 2.2 | 2.1 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 80.5 | 84.3 | 81.1 | 82.9 | 80.0 |
Total U.S. Demand | 102.3 | 105.9 | 103.0 | N/A | 96.1 |
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 | 78 | 77 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Aug 30 | Week ended Aug 23 | 2023 | 2022 | 2021 | |
Wind | 7 | 8 | 10 | 11 | 10 |
Solar | 5 | 6 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 1 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 47 | 45 | 41 | 38 | 37 |
Coal | 17 | 16 | 17 | 21 | 23 |
Nuclear | 17 | 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 | 1.85 | 1.89 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.30 | 1.45 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.22 | 2.26 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.26 | 1.36 | |||
Chicago Citygate NG-CG-CH-SNL | 1.56 | 1.50 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.37 | 1.43 | |||
SoCal Citygate NG-SCL-CGT-SNL | 1.51 | 1.50 | |||
Waha Hub NG-WAH-WTX-SNL | -4.80 | -2.18 | |||
AECO NG-ASH-ALB-SNL | 0.58 | 0.41 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 29.00 | 28.75 | |||
PJM West EL-PK-PJMW-SNL | 39.00 | 42.50 | |||
Ercot North EL-PK-ERTN-SNL | 26.75 | 26.00 | |||
Mid C EL-PK-MIDC-SNL | 41.25 | 36.00 | |||
Palo Verde EL-PK-PLVD-SNL | 38.00 | 38.50 | |||
SP-15 EL-PK-SP15-SNL | 32.50 | 28.50 |
Reporting by Scott DiSavino; Editing by Kirsten Donovan
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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