US natgas prices jump 7% to one-week high on rising power, LNG demand
Adds latest prices
By Scott DiSavino
June 3 (Reuters) -U.S. natural gas futures soared about 7%to a one-week high on Monday on forecasts for demand to rise as hot weather promptspower generators to burn more fuel to run air conditioners and as flows to liquefied natural gas (LNG) export plants increase.
Traders saidU.S. prices were also supportedby a 5% jumpin gas prices in Europe TRNLTTFMc1 due to an unplanned shutdown of an offshore production hub in Norway.
Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange rose 16.9 cents, or 6.5%, to settle at $2.756 per million British thermal units (mmBtu), their highest close since May 22.
In the spot market, powerprices in California and Arizona turned negative again, while next-day gas prices in northern California fell to their lowest since 2001 amid little demand and ample cheap hydropower and other renewable supplies.
SUPPLY AND DEMAND
Gas output in the Lower 48 U.S. states rose to an average of 98.3 billion cubic feet per day (bcfd) so far in June, up from 98.1 bcfd in May, according to data from financial firm LSEG. That compares with a monthly record of 105.5 bcfd in December 2023.
Meteorologists projected weather across the Lower 48 states would remain warmer than normal through June 18 except for some near-normaldays from June 8-12.
LSEG forecast gas demand in the Lower 48, including exports, would rise from 94.9 bcfd this week to 95.3 bcfd next week. Those forecasts were lower than LSEG's outlook on Friday.
U.S. exports to Mexico rose to an average of 7.1 bcfd so far in June, up from a record 7.0 bcfd in May, as Mexican generators burn more gas to meet growing power demand and New Fortress Energy NFE.O pulls in more U.S. gas for its LNG export plant in Altamira, Mexico.
Gas flows to the seven big U.S. LNG export plants rose to 13.3 bcfd so far in June, up from 12.9 bcfd in May.
That, however, remains well below the monthly record high of 14.7 bcfd in December 2023 due to ongoing maintenance at several plants, including Cheniere Energy's LNG.N Sabine Pass and Venture Global's Calcasieu Pass in Louisiana.
In other LNG news, liquefaction Train 2 at Freeport LNG's export plant tripped on May 30, according to a company filing with state environmental regulators.
Data from LSEG showed that feedgas to the three-train 2.1-bcfd Freeport slid from 2.0 bcfd on May 29 to 1.6 bcfd on May 30 before returning to an expected 2.0 bcfd on Monday.
The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's war in Ukraine.
Gas was trading at a five-month high of $12 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and near a five-month high of $12 at the Japan Korea Marker (JKM) benchmark in Asia JKMc1. NG/EU
But no matter how high gas prices rise overseas, U.S. LNG sales will remain limited until all of the export plants complete their maintenance work.
The U.S. can turn about 13.8 bcfd of gas into LNG when all plants are operating at full power. The plants, however, can pull in a little more gas since they consume some of the fuel to power operations.
Week ended May 31 Forecast | Week ended May 24 Actual | Year ago May 31 | Five-year average May 31 | ||
U.S. weekly natgas storage change (bcf): | +86 | +84 | +105 | +103 | |
U.S. total natgas in storage (bcf): | 2,881 | 2,795 | 2,520 | 2,312 | |
U.S. total storage versus 5-year average | 24.6% | 26.5% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.69 | 2.59 | 2.47 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 12.04 | 10.95 | 10.32 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 11.91 | 11.96 | 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 | 10 | 11 | 18 | 18 | 20 |
U.S. GFS CDDs | 167 | 154 | 119 | 143 | 140 |
U.S. GFS TDDs | 177 | 165 | 137 | 161 | 160 |
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 | 99.1 | 98.5 | 98.8 | 103.1 | 94.7 |
U.S. Imports from Canada | 7.0 | 7.2 | 7.1 | 7.9 | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 106.1 | 105.7 | 105.9 | 111.0 | 112.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.8 | 2.0 | 2.1 | 2.1 | 2.3 |
U.S. Exports to Mexico | 7.2 | 7.1 | 7.0 | 6.6 | 6.0 |
U.S. LNG Exports | 13.1 | 13.2 | 13.0 | 11.8 | 8.5 |
U.S. Commercial | 4.7 | 4.5 | 4.5 | 4.5 | 4.8 |
U.S. Residential | 4.1 | 3.8 | 3.8 | 3.8 | 4.3 |
U.S. Power Plant | 33.6 | 35.8 | 36.3 | 38.1 | 36.3 |
U.S. Industrial | 21.6 | 21.6 | 21.7 | 21.2 | 21.3 |
U.S. Plant Fuel | 4.9 | 4.9 | 4.9 | 4.9 | 4.9 |
U.S. Pipe Distribution | 1.9 | 1.9 | 1.9 | 1.9 | 1.9 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 70.9 | 72.6 | 73.2 | 74.5 | 73.6 |
Total U.S. Demand | 93.0 | 94.9 | 95.3 | 95.0 | 90.4 |
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 | 78 | 77 | 83 | 107 | 81 |
Jan-Jul | 79 | 78 | 77 | 102 | 79 |
Oct-Sep | 80 | 80 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jun 7 | Week ended May 31 | Week ended May 24 | Week ended May 17 | Week ended May 10 | |
Wind | 9 | 11 | 13 | 10 | 13 |
Solar | 7 | 6 | 6 | 6 | 6 |
Hydro | 7 | 7 | 7 | 8 | 7 |
Other | 1 | 1 | 1 | 1 | 1 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 40 | 40 | 38 | 40 | 41 |
Coal | 14 | 14 | 14 | 14 | 14 |
Nuclear | 22 | 20 | 19 | 20 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 1.78 | 1.87 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.20 | 1.25 | |||
PG&E Citygate NG-CG-PGE-SNL | 1.56 | 1.98 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.15 | 1.11 | |||
Chicago Citygate NG-CG-CH-SNL | 1.22 | 1.39 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.24 | 1.32 | |||
SoCal Citygate NG-SCL-CGT-SNL | 0.93 | 1.35 | |||
Waha Hub NG-WAH-WTX-SNL | 0.08 | 0.54 | |||
AECO NG-ASH-ALB-SNL | 0.72 | 0.84 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 22.75 | 25.00 | |||
PJM West EL-PK-PJMW-SNL | 22.75 | 25.75 | |||
Ercot North EL-PK-ERTN-SNL | 27.75 | 36.00 | |||
Mid C EL-PK-MIDC-SNL | 23.50 | 25.75 | |||
Palo Verde EL-PK-PLVD-SNL | -2.50 | 14.75 | |||
SP-15 EL-PK-SP15-SNL | -6.50 | 12.75 |
Reporting by Scott DiSavino; Editing by David Gregorio and Leslie Adler
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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