US natural gas prices fall 3% after Mountain Valley pipe startup approved
Adds latest prices
By Scott DiSavino
June 12 (Reuters) -U.S. natural gas futures fell about 3%on Wednesday on expectations that supplies will soon rise with the approved startupof the Mountain Valley gas pipe and news about plans by EQT EQT.N, the nation's biggest gas producer, to boost output.
Federal energy regulators approved the startup of the Mountain Valley Pipeline from West Virginia to Virginia late Tuesday.
Analysts expect the Mountain Valley startup will allow Appalachian producers to slowly boost output in coming months as other energy firms fix constraints on connecting pipes in Virginia and other states, allowing gas flows on Mountain Valley to reach the pipe's full 2-billion-cubic-feet-per-day(bcfd) capacity.
In other news, EQT EQT.N CEO Toby Rice told Natural Gas Intelligence at the LDC Gas Forums Northeast conference in Boston that EQT started to bring back some of the 1 bcfd of production it started to curtail in February when gas prices dropped. With gas prices rising in April and May, analysts said they sawsigns that EQT and other producers started to boost output again in May.
Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 8.4 cents, or 2.7%, to settle at $3.045 per million British thermal units (mmBtu).On Tuesday, the contract closed at its highest price since Jan. 12.
The futures price decline came despite an ongoing drop in output so far in June and forecasts for hotter weather through at least the end of the month that should boost the amount of gas power generators need to burn to keep air conditioners humming.
Other factors keeping a lid on futures prices this year include consistently lower spot prices at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana and the oversupply of gas in storage despite six weeks of smaller-than-usualstorage builds.
Analysts said current gas stockpiles were still around 24% above normal levels for this time of year. EIA/GAS NGAS/POLL
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.7 bcfd so far in June, from 98.1 bcfd in May. That compares with a monthly record of 105.5 bcfd in December 2023.
On a daily basis, output was on track to drop by around 2.3 bcfd over the past five days to a preliminary 21-week low of 95.7 bcfd on Wednesday. Traders, however, noted preliminary data is often revised later in the day.
Before recent output declines in June, analysts said increases in May were a sign producers were slowly boosting output due to a 47% jump in futures prices in April and May. Output hit a six-week high of 99.5 bcfd on May 24.
Overall, U.S. gas production has remained down 8% so far in 2024 after several energy firms, including EQT EQT.N and Chesapeake Energy CHK.O, delayed well completions and cut drilling activities when prices fell in February and March.
Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least June 27.
LSEG forecast gas demand in the Lower 48, including exports, would jump from 95.3 bcfd this week to 98.9 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday.
Gas flows to the seven big U.S. LNG export plants rose to 13.1 bcfd so far in June, from 12.9 bcfd in May.
Week ended June 7 Forecast | Week ended May 31 Actual | Year ago June 7 | Five-year average June 7 | ||
U.S. weekly natgas storage change (bcf): | +74 | +98 | +90 | +89 | |
U.S. total natgas in storage (bcf): | 2,967 | 2,893 | 2,610 | 2,401 | |
U.S. total storage versus 5-year average | 23.6% | 25.1% | |||
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 | 3.08 | 3.13 | 2.47 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 11.25 | 10.79 | 10.32 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 12.00 | 11.97 | 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 | 8 | 7 | 14 | 12 | 12 |
U.S. GFS CDDs | 213 | 207 | 138 | 160 | 161 |
U.S. GFS TDDs | 221 | 214 | 152 | 172 | 173 |
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 | 98.3 | 97.2 | 97.6 | 102.7 | 94.7 |
U.S. Imports from Canada | 7.3 | 7.3 | 7.0 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 105.6 | 104.5 | 104.6 | 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 | 6.7 | 6.3 | 6.9 | N/A | 6.0 |
U.S. LNG Exports | 13.2 | 13.0 | 13.1 | 11.3 | 8.5 |
U.S. Commercial | 4.5 | 4.5 | 4.5 | 4.5 | 4.8 |
U.S. Residential | 3.8 | 3.8 | 3.8 | 3.8 | 4.3 |
U.S. Power Plant | 35.4 | 37.5 | 40.3 | 37.0 | 36.3 |
U.S. Industrial | 21.6 | 21.6 | 21.7 | 21.2 | 21.3 |
U.S. Plant Fuel | 4.9 | 4.8 | 4.8 | 4.9 | 4.9 |
U.S. Pipe Distribution | 1.9 | 2.0 | 2.1 | 1.9 | 1.9 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 72.2 | 74.4 | 77.2 | 73.4 | 73.6 |
Total U.S. Demand | 94.0 | 95.3 | 98.9 | N/A | 90.4 |
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 | 76 | 76 | 83 | 107 | 81 |
Jan-Jul | 76 | 76 | 77 | 102 | 79 |
Oct-Sep | 79 | 79 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jun 14 | Week ended Jun 7 | Week ended May 31 | Week ended May 24 | Week ended May 17 | |
Wind | 10 | 11 | 11 | 13 | 10 |
Solar | 6 | 6 | 6 | 6 | 6 |
Hydro | 7 | 7 | 7 | 7 | 8 |
Other | 1 | 1 | 1 | 1 | 1 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 41 | 41 | 40 | 38 | 40 |
Coal | 15 | 15 | 14 | 14 | 14 |
Nuclear | 20 | 19 | 20 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.71 | 2.61 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.30 | 1.25 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.16 | 2.05 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.32 | 1.21 | |||
Chicago Citygate NG-CG-CH-SNL | 1.83 | 1.81 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.47 | 1.44 | |||
SoCal Citygate NG-SCL-CGT-SNL | 1.86 | 1.80 | |||
Waha Hub NG-WAH-WTX-SNL | 1.67 | 1.95 | |||
AECO NG-ASH-ALB-SNL | 0.62 | 0.61 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 27.25 | 25.75 | |||
PJM West EL-PK-PJMW-SNL | 28.25 | 24.00 | |||
Ercot North EL-PK-ERTN-SNL | 41.00 | 39.00 | |||
Mid C EL-PK-MIDC-SNL | 28.25 | 14.00 | |||
Palo Verde EL-PK-PLVD-SNL | 36.38 | 22.75 | |||
SP-15 EL-PK-SP15-SNL | 23.00 | 19.75 |
Reporting by Scott DiSavino; Editing by Rod Nickel 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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