US natgas rises over 2% on hot weather, higher demand forecasts
June 18 (Reuters) -U.S. natural gas futures rose more than 2% on Tuesday, helped by forecasts for warmer-than-usual weather and higher demand for the next week than previously expected.
Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 3.
Temperatures are expected to be above normal starting July across more parts of U.S., compared with last year "when the heat was concentrated in just Texas or currently where the heat is concentrated in just the Northeast and that's when we start to think about true gas demands accelerating - well above last year," said Gary Cunningham, director of market research at Tradition Energy.
Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange rose 7.8 cents, or 2.8%, to $2.87 per million British thermal units (MMBtu) by 11:00 a.m. EDT (1500 GMT).
The contract shed over 4% in the previous session, to hit their lowest in one-and-a-half weeks on forecasts for a steeper than previously expected rise in gas supply this week, and slight replacement from coal-energy in the U.S. energy mix.
Meanwhile, traders also assessed the impact from potential tropical cyclone one, which is expected to become a tropical storm as it reaches western Gulf Coast late Wednesday, and could lead to lower demand for gas as temperatures drop across Texas.
"If that storm tracks even just slightly more northward, it can have more of an impact on the LNG export terminals," said Cunningham.
Gas prices rallied about 22% in the first 11 days of June to hit a 21-week high of $3.159/MMBtu on June 11, before shedding roughly 30 cents on the back of lower demand and higher gas output, some of which resulted from the Mountain Valley pipeline coming in service.
"We see the market lifting back up to the $3.22 highs that were established a week ago and where we will be looking to accept profits in anticipation of a renewed swing south back toward the $2.80 level," energy advisory Ritterbusch and Associates said in a note.
Meanwhile, European gas prices ticked up as warmer weather is set to lift power demand for cooling and competition increases for liquefied natural gas (LNG) supplies. NG/EU
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states had fallen to an average of 96.9 billion cubic feet per day (bcfd) so far in June from 98.1 bcfd in May. That compares with a monthly record of 105.5 bcfd in December 2023.
Forecast for total U.S. supply for the ongoing week were raised from 106.1 bcfd on Monday to 106.3 bcfd on Tuesday.
LSEG forecast that heat would boost gas demand in the Lower 48, including exports, from 96.5 bcfd this week to 102.4 bcfd next week. The forecasts for the next week were slightly higher than LSEG's outlook on Monday.
Gas flows to the seven big U.S. LNG export plants, meanwhile, were at 12.9 bcfd so far in June, the same as the 12.9 bcfd in May.
That, however, remains well below the monthly record high of 14.7 bcfd in December 2023 due to ongoing plant and pipeline maintenance at several Louisiana facilities, including Cameron LNG, Cheniere Energy's LNG.N Sabine Pass, Venture Global's Calcasieu Pass.
Week ended June 14 Forecast | Week ended June 7 Actual | Year ago June 14 | Five-year average June 14 | ||
U.S. weekly natgas storage change (bcf): | 69 | 74 | 92 | 83 | |
U.S. total natgas in storage (bcf): | 3,043 | 2,974 | 2,702 | 2,484 | |
U.S. total storage versus 5-year average | 22.50% | 23.90% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.87 | 2.79 | 2.47 | 2.66 | 3.6 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 10.98 | 10.87 | 10.32 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 13 | 12 | 10.61 | 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 | 5 | 6 | 6 | 9 | 7 |
U.S. GFS CDDs | 241 | 232 | 183 | 172 | 181 |
U.S. GFS TDDs | 246 | 238 | 189 | 181 | 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 | 97.7 | 98.6 | 99.0 | N/A | 94.7 |
U.S. Imports from Canada | 7.4 | 7.4 | 7.1 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | N/A | 0 |
Total U.S. Supply | 105.0 | 106.3 | 106.1 | N/A | 112.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.6 | 1.6 | 1.6 | N/A | 2.3 |
U.S. Exports to Mexico | 7.0 | 6.9 | 7.1 | N/A | 6 |
U.S. LNG Exports | 12.9 | 12.5 | 12.7 | N/A | 8.5 |
U.S. Commercial | 4.5 | 4.5 | 4.4 | N/A | 4.8 |
U.S. Residential | 3.8 | 3.8 | 3.6 | N/A | 4.3 |
U.S. Power Plant | 37.0 | 38.4 | 44.1 | N/A | 36.3 |
U.S. Industrial | 21.6 | 21.6 | 21.7 | N/A | 21.3 |
U.S. Plant Fuel | 4.8 | 4.9 | 4.9 | N/A | 4.9 |
U.S. Pipe Distribution | 2.0 | 2.0 | 2.2 | N/A | 1.9 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | N/A | 0.1 |
Total U.S. Consumption | 73.8 | 75.4 | 81.0 | N/A | 73.6 |
Total U.S. Demand | 95.4 | 96.5 | 102.4 | N/A | 90.4 |
N/A is Not Available | |||||
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jun 21 | Week ended Jun 14 | Week ended Jun 7 | Week ended May 31 | Week ended May 24 | |
Wind | 14 | 9 | 11 | 11 | 13 |
Solar | 6 | 6 | 6 | 6 | 6 |
Hydro | 6 | 7 | 7 | 7 | 7 |
Other | 1 | 1 | 1 | 1 | 1 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 37 | 41 | 41 | 40 | 38 |
Coal | 17 | 15 | 15 | 14 | 14 |
Nuclear | 19 | 19 | 19 | 20 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.50 | 2.74 | |||
Transco Z6 New York NG-CG-NY-SNL | 2.22 | 1.45 | |||
PG&E Citygate NG-CG-PGE-SNL | 1.80 | 1.81 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.98 | 1.60 | |||
Chicago Citygate NG-CG-CH-SNL | 2.06 | 2.01 | |||
Algonquin Citygate NG-CG-BS-SNL | 3.85 | 1.97 | |||
SoCal Citygate NG-SCL-CGT-SNL | 1.65 | 1.68 | |||
Waha Hub NG-WAH-WTX-SNL | 1.40 | 1.19 | |||
AECO NG-ASH-ALB-SNL | 0.74 | 0.55 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 80.25 | 28.25 | |||
PJM West EL-PK-PJMW-SNL | 47.75 | 25.00 | |||
Ercot North EL-PK-ERTN-SNL | 23.25 | 21.00 | |||
Mid C EL-PK-MIDC-SNL | 30.67 | 22.75 | |||
Palo Verde EL-PK-PLVD-SNL | 18.75 | 8.25 | |||
SP-15 EL-PK-SP15-SNL | 17.00 | 7.75 |
Reporting by Daksh Grover and Harshit Verma in Bengaluru;
Editing by Marguerita Choy
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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