US natgas at near 3-week high on output drop, hotter weather forecasts
Adds closing price
Aug 12 (Reuters) -U.S. natural gas futures rose more than 2% to a near three-week high on Monday, supported by a drop in output in recent days and forecasts for hotter weather that should boost the amount of gas power generators burn to keep air conditioners humming.
Front-month gas futures NGc1 for September delivery on the New York Mercantile Exchange rose 4.6 cents, or about 2.1%, to settle at $2.189 per million British thermal units.
"Drilling cutback announcements by major organizations, whether it be Chesapeake or EQT or whomever, everyone seems to be pulling back on their end-of-year production outlooks, and that's definitely giving us support," said Gary Cunningham, director of market research at Tradition Energy.
The market is also getting some boost from "weather shifts, which are showing some heat towards the end of August and into early September" and some European buyers come back into the U.S. market for hedging purposes, Cunningham added.
Major U.S. natural gas producers were preparing to further curtail production in the second half, after prices sank nearly 40% over the past two months.
Financial firm LSEG said gas output in the Lower 48 U.S. states has fallen to an average of 102.8 billion cubic feet per day (bcfd) so far in August, down from 103.4 bcfd in July. That compares with a monthly record high of 105.5 bcfd in December 2023.
Meanwhile, LSEG estimated 228 cooling degree days (CDDs) over the next two weeks. The normal for this time of year is 183 CDDs. LSEG forecast average gas demand in the Lower 48 states, including exports, to rise to 105.9 bcfd this week from 104.0 bcfd last week, and then expected it to rise to 107.9 bcfd next week.
Dutch wholesale gas prices inched up on Monday morning amid concerns about gas supplies via Ukraine, while British prices rose due to outages in the UK Continental Shelf.NG/EU
In other news, Woodside Energy WDS.AX which agreed last month to buy Tellurian TELL.A, the developer of a fully permitted U.S. liquefied natural gas project, for $1.2 billion including debt is unlikely to face a rival bid.
Week ended Aug 9 forecasts | Week ended Aug 2 Actual | Year ago Aug 2 | Five-year average Aug 2 | ||
U.S. weekly natgas storage change (bcf): | +19 | +21 | +25 | +38 | |
U.S. total natgas in storage (bcf): | 3,289 | 3,270 | 2,022 | 2,846 | |
U.S. total storage versus 5-year average | 13.8% | 14.9% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.23 | 2.18 | 2.65 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 13.48 | 12.94 | 11.21 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 12.55 | 12.57 | 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 | 8 | - | 1 | 2 | 5 |
U.S. GFS CDDs | 228 | - | 212 | 194 | 183 |
U.S. GFS TDDs- | 236 | - | 213 | 196 | 188 |
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 | 102.2 | 101.8 | 102.1 | 102.3 | 96.3 |
U.S. Imports from Canada | 7.7 | 7.6 | 7.6 | N/A | 7.3 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 109.9 | 109.4 | 109.7 | N/A | 103.7 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.6 | 1.6 | 1.6 | N/A | 2.3 |
U.S. Exports to Mexico | 7.2 | 7.2 | 7.1 | N/A | 6.1 |
U.S. LNG Exports | 12.7 | 12.8 | 12.8 | 12.6 | 7.7 |
U.S. Commercial | 4.5 | 4.5 | 4.6 | 4.4 | 4.5 |
U.S. Residential | 3.9 | 3.8 | 3.9 | 3.5 | 3.4 |
U.S. Power Plant | 44.9 | 46.7 | 48.5 | 48.3 | 43.0 |
U.S. Industrial | 21.8 | 21.8 | 21.9 | 21.3 | 21.7 |
U.S. Plant Fuel | 5.1 | 5.0 | 5.0 | 5.0 | 5.1 |
U.S. Pipe Distribution | 2.2 | 2.2 | 2.3 | 2.2 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 82.5 | 84.3 | 86.4 | 84.8 | 80.0 |
Total U.S. Demand | 104.0 | 105.9 | 107.9 | 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 | 78 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Aug 16 | Week ended Aug 9 | 2023 | 2022 | 2021 | |
Wind | 6 | 7 | 10 | 11 | 10 |
Solar | 5 | 6 | 4 | 3 | 3 |
Hydro | 5 | 6 | 6 | 6 | 7 |
Other | 1 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 47 | 45 | 41 | 38 | 37 |
Coal | 18 | 17 | 17 | 21 | 23 |
Nuclear | 17 | 19 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 1.94 | 1.85 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.55 | 1.38 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.82 | 2.85 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.32 | 1.28 | |||
Chicago Citygate NG-CG-CH-SNL | 1.80 | 1.70 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.54 | 1.54 | |||
SoCal Citygate NG-SCL-CGT-SNL | 1.92 | 2.05 | |||
Waha Hub NG-WAH-WTX-SNL | -4.76 | -1.44 | |||
AECO NG-ASH-ALB-SNL | 0.78 | 0.81 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 31.50 | 35.75 | |||
PJM West EL-PK-PJMW-SNL | 31.25 | 38.00 | |||
Ercot North EL-PK-ERTN-SNL | 27.00 | 33.25 | |||
Mid C EL-PK-MIDC-SNL | 32.00 | 54.50 | |||
Palo Verde EL-PK-PLVD-SNL | 34.25 | 38.50 | |||
SP-15 EL-PK-SP15-SNL | 33.75 | 38.25 |
Reporting by Sherin Elizabeth Varghese and Brijesh Patel in Bengaluru; Editing by David Gregorio and Jonathan Oatis
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
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