US natural gas prices drop to 7-week low on rising output, high storage levels
July 5 (Reuters) -U.S. natural gas futures slipped nearly 2% to a seven-week low on Friday, as rising output and ample gas supply in storage outweighed support from forecasts for higher demand over the next two weeks.
Front-month gas futures NGc1 for May delivery on the New York Mercantile Exchange were down 4.6 cents, or 1.9%, to $2.37 per million British thermal units (mmBtu) at 10:57 a.m. ET (1457 GMT). The contract was heading for its biggest weekly loss since mid-February, down 8.8%.
"Much of the price plunge of the past 3-1/2 weeks has related to an announced production increase by a major U.S. producer that appears to have contributed to a lift in output that has overshadowed the weather factor that still appears tilted in a bullish direction," energy advisory Ritterbusch and Associates said in a note. It did not identify the producer.
"A broad cool-down across a large chunk of the nation’s mid-continent appears to be weighing on spot pricing with an expected warmup later next week pushed to the sidelines so far as a price motivator."
Financial company LSEG said gas output in the Lower 48 U.S. states has risen to an average of 102.1 billion cubic feet per day (bcfd) in July.
That was up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May as many producers reduced drilling activities after prices fell to 3-1/2-year lows in February and March. U.S. output hit a monthly record high of 105.5 bcfd in December 2023.
With hotter weather expected next week, LSEG forecasts gas demand in the Lower 48 states, including exports, to increase to 106.8 bcfd next week, from 105.9 bcfd this week.
Data from the U.S. Energy Information Administration on Wednesday indicated utilities added 32 billion cubic feet (bcf) of gas into storage during the week ended June 28, in line with analysts' forecasts in a Reuters poll. That compares with an increase of 76 bcf in the same week last year and a five-year (2019-2023) average rise of 69 bcf for this time of year. EIA/GASGAS/POLL
Gas stockpiles were now about 19% above normal for this time of year.
"As the air-conditioning load and the heat for July and August kick in, I think we should eventually see higher prices," said Thomas Saal, senior vice president for energy at StoneX Financial.
The Electric Reliability Council of Texas (ERCOT), power-grid operator for most of the state, said peak demand this week will approach but not break the record for July as homes and businesses crank up their air conditioners to escape a heat wave.
Meanwhile, in Europe, gas prices were largely flat with a small rise in demand balanced by Norwegian gas flows, though uncertainty over supplies later in the year offered some support. NG/EU
Week ended June 28 Actual | Week ended June 21 Actual | Year ago June 28 | Five-year average June 28 | ||
U.S. weekly natgas storage change (bcf): | +32 | +57 | +76 | +69 | |
U.S. total natgas in storage (bcf): | 3,134 | 3,102 | 2,859 | 2,638 | |
U.S. total storage versus 5-year average | 18.8% | 20.7% | |||
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 | 2.36 | 2.43 | 2.64 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 10.50 | 10.37 | 9.58 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 12.42 | 12.56 | 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 | 2 | 2 | 3 | 3 | 4 |
U.S. GFS CDDs | 262 | 255 | 226 | 209 | 199 |
U.S. GFS TDDs | 264 | 257 | 229 | 212 | 203 |
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 | 102.1 | 101.8 | 103.3 | 95.5 |
U.S. Imports from Canada | 8.1 | 7.2 | 7.0 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 110 | 109.3 | 108.8 | N/A | 112.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.7 | 1.4 | 1.5 | N/A | 2.3 |
U.S. Exports to Mexico | 6.6 | 6.8 | 6.9 | N/A | 6.1 |
U.S. LNG Exports | 12.4 | 13.0 | 13.0 | 13.0 | 8.6 |
U.S. Commercial | 4.3 | 4.3 | 4.4 | 4.3 | 4.5 |
U.S. Residential | 3.5 | 3.5 | 3.6 | 3.4 | 3.6 |
U.S. Power Plant | 41.9 | 47.8 | 48.4 | 44.9 | 43.3 |
U.S. Industrial | 21.6 | 21.6 | 21.7 | 21.2 | 21.3 |
U.S. Plant Fuel | 5.0 | 5.0 | 5.0 | 4.9 | 4.9 |
U.S. Pipe Distribution | 2.1 | 2.3 | 2.3 | 2.2 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 78.5 | 84.7 | 85.5 | 81.0 | 79.9 |
Total U.S. Demand | 99.2 | 105.9 | 106.8 | N/A | 96.9 |
N/A is Not Available | |||||
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended July 5 | Week ended June 28 | Week ended June 21 | Week ended June 14 | Week ended June 7 | |
Wind | 10 | 9 | 12 | 9 | 11 |
Solar | 6 | 5 | 6 | 6 | 6 |
Hydro | 6 | 5 | 6 | 7 | 7 |
Other | 1 | 1 | 1 | 1 | 1 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 42 | 43 | 40 | 41 | 41 |
Coal | 17 | 19 | 18 | 16 | 15 |
Nuclear | 18 | 17 | 17 | 19 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.02 | 2.06 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.44 | 1.33 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.80 | 2.83 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.34 | 1.34 | |||
Chicago Citygate NG-CG-CH-SNL | 1.54 | 1.58 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.45 | 1.43 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.04 | 2.20 | |||
Waha Hub NG-WAH-WTX-SNL | 1.89 | -2.06 | |||
AECO NG-ASH-ALB-SNL | 0.63 | 0.53 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 28.00 | 30.50 | |||
PJM West EL-PK-PJMW-SNL | 41.00 | 42.50 | |||
Ercot North EL-PK-ERTN-SNL | 31.00 | 27.25 | |||
Mid C EL-PK-MIDC-SNL | 114.67 | 41.12 | |||
Palo Verde EL-PK-PLVD-SNL | 85.50 | 66.00 | |||
SP-15 EL-PK-SP15-SNL | 54.00 | 58.25 |
Reporting by Daksh Grover and Brijesh Patel in Bengaluru; Editing by Rod Nickel
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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