US natgas prices steady as rising output offset higher demand forecasts
By Scott DiSavino
July 26 (Reuters) -U.S. natural gas futures held near a one-week low on Friday as rising output offset forecasts for more demand over the next two weeks than previously expected during what could be record heat in the Lower 48 U.S. states.
Also weighing on prices in recent weeks, as traders noted, was still a tremendous oversupply of gas in storage even though injections have been smaller than usual in 10 of the past 11 weeks.
Gas stockpiles were currently about 16% above normal for this time of year. EIA/GAS NGAS/POLL
Recent storage builds have mostly been smaller than usual because several producers cut output earlier in the year after futures prices dropped to 3-1/2-year lows in February and March, traders said.
Higher prices in April and May, however, prompted some drillers, including EQT EQT.N and Chesapeake Energy CHK.O, to boost output.
On its second to last day as the front-month, gas futures NGc1 for August delivery on the New York Mercantile Exchange remained unchanged at $2.038 per million British thermal units (mmBtu) at 9:38 a.m. EDT (1338 GMT).
That put the contract on track for its lowest close since July 17 for a third day in a row and keeps it within a penny of the 11-week closing low of $2.035 per mmBtu on July 17.
For the week, the front-month was down about 4% after dropping about 9% last week. That would be the sixth decline in seven weeks, putting the contract down about 30% during that time.
The latest weather forecasts called for extreme heat to return in August, which should boost the amount of gas power generators burn to produce electricity to keep air conditioners humming.
Meteorologists forecast temperatures across the Lower 48 states will average around 83.6 degrees Fahrenheit (28.7 Celsius) on Aug. 2, according to data from financial firm LSEG.
That would top the current record high average temperature of 83.0 F set on July 20, 2022, when power demand peaked at an all-time high of 742,600 megawatts, according to LSEG and federal energy data.
In addition to a possible fresh record for power demand, next week's heat was also on track to boost the volume of gas power generators burn to a record high on Aug. 2.
LSEG forecast power generators would burn about 55.5 billion cubic feet per day (bcfd) of gas on Aug. 2, which would top the current all-time high of 54.1 bcfd reached on July 9 when generators had to burn more gas due to a lack of wind power.
The amount of power produced by wind fell even further this week, dropping to a preliminary 59-month low on Tuesday.
SUPPLY AND DEMAND
LSEG said gas output in the Lower 48 states rose to an average of 102.4 billion cubic feet per day so far in July, from an average of 100.2 bcfd in June and a 17-month low of 99.4 bcfd in May.
U.S. output hit a monthly record high of 105.5 bcfd in December 2023.
Meteorologists projected weather across the Lower 48 would remain mostly near normal through July 28 before turning hotter than normal through at least Aug. 10.
With more heat coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.8 bcfd this week to 106.0 bcfd next week and 111.8 bcfd in two weeks. The forecasts for this week and next week were higher than LSEG's outlook on Thursday.
Week ended July 26 Forecast | Week ended July 19 Actual | Year ago July 26 | Five-year average July 26 | ||
U.S. weekly natgas storage change (bcf): | +39 | +22 | +15 | +33 | |
U.S. total natgas in storage (bcf): | 3,270 | 3,231 | 2,997 | 2,808 | |
U.S. total storage versus 5-year average | 16.5% | 16.4% | |||
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 | 2.02 | 2.04 | 2.64 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 10.37 | 10.14 | 9.58 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 12.08 | 12.24 | 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 | 3 | 3 | 1 | 2 | 3 |
U.S. GFS CDDs | 256 | 249 | 234 | 212 | 201 |
U.S. GFS TDDs | 259 | 252 | 235 | 214 | 204 |
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 | 102.3 | 102.5 | 102.7 | 102.3 | 95.5 |
U.S. Imports from Canada | 7.9 | 7.7 | 7.8 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 110.2 | 110.3 | 110.5 | N/A | 112.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.8 | 1.7 | 1.7 | N/A | 2.3 |
U.S. Exports to Mexico | 7.2 | 7.3 | 7.1 | N/A | 6.1 |
U.S. LNG Exports | 11.0 | 11.9 | 12.9 | 12.6 | 8.6 |
U.S. Commercial | 4.4 | 4.4 | 4.4 | 4.4 | 4.5 |
U.S. Residential | 3.5 | 3.5 | 3.6 | 3.5 | 3.6 |
U.S. Power Plant | 49.1 | 47.9 | 47.1 | 48.3 | 43.3 |
U.S. Industrial | 21.7 | 21.7 | 21.7 | 21.3 | 21.3 |
U.S. Plant Fuel | 5.1 | 5.1 | 5.1 | 5.0 | 4.9 |
U.S. Pipe Distribution | 2.3 | 2.3 | 2.2 | 2.2 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 86.2 | 84.9 | 84.3 | 84.8 | 79.9 |
Total U.S. Demand | 106.2 | 105.8 | 106.0 | N/A | 96.9 |
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 | 77 | 77 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jul 26 | Week ended Jul 19 | 2023 | 2022 | 2021 | |
Wind | 3 | 7 | 10 | 11 | 10 |
Solar | 5 | 5 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 1 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 49 | 46 | 41 | 38 | 37 |
Coal | 18 | 19 | 17 | 21 | 23 |
Nuclear | 18 | 16 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.00 | 2.00 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.39 | 1.51 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.49 | 3.50 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.27 | 1.36 | |||
Chicago Citygate NG-CG-CH-SNL | 1.77 | 1.89 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.60 | 1.72 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.87 | 2.82 | |||
Waha Hub NG-WAH-WTX-SNL | 0.67 | 0.93 | |||
AECO NG-ASH-ALB-SNL | 0.67 | 0.65 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 32.50 | 38.50 | |||
PJM West EL-PK-PJMW-SNL | 36.00 | 42.25 | |||
Ercot North EL-PK-ERTN-SNL | 26.00 | 26.50 | |||
Mid C EL-PK-MIDC-SNL | 66.25 | 64.25 | |||
Palo Verde EL-PK-PLVD-SNL | 68.00 | 80.00 | |||
SP-15 EL-PK-SP15-SNL | 50.25 | 65.50 |
Reporting by Scott DiSavino
Editing by Tomasz Janowski
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
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.