US natgas prices slide 3% on forecasts for less demand, rising output
Adds EQT production forecasts
By Scott DiSavino
July 24 (Reuters) -U.S. natural gas futures slid about 3% to a one-week low on Wednesday on forecasts for less demand next week than previously expected and expectations by EQT EQT.N, the nation's biggest gas producer, that output will rise during the second half of the year.
Another bearish factor keeping a lid on prices was the tremendous oversupply of gas still in storage.
There was still about 16% more gas in storage than normal for this time of year even though injections have been smaller than usual for nine of the past 10 weeks after several producers cut output earlier in the year when futures prices dropped to 3-1/2 year lows in February and March. EIA/GAS NGAS/POLL
Higher prices in April and May, however, prompted some drillers, including EQT EQT.N and Chesapeake Energy CHK.O, to boost output in June and July.
EQT said late Tuesday that it produced about 508 billion cubic feet of gas equivalent (bcfe) in the second quarter and projected output would rise to around 510-560 bcfe in the third quarter and 515-565 bcfe in the fourth quarter.
Even though EQT kept its output forecast for all of 2024 flat at 2,100-2,200 bcfe, analysts noted the company's expectations that output would rise in the second half of the year came event though gas futures were down about 19% so far in July.
Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 7.0 cents, or 3.2%, to settle at $2.117 per million British thermal units, their lowest close since July 17.
That price decline came despite the latest weather forecast calling 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 83.2 degrees Fahrenheit (28.4 Celsius) on Aug. 2, according to LSEG data.
That would top the current record high temperature average of 83.0 F set on July 20, 2022 when power demand hit an all-time high of 742,600 megawatts, according to federal energy data.
In addition to the heat, power generators were burning more gas this week after the amount of electricity produced by wind farms in the Lower 48 states fell to a 33-month low on Monday.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 states rose to an average of 102.4 billion cubic feet per day (bcfd) so far in July, up 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. 8.
With hotter weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 105.2 bcfd this week to 105.8 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday, while the forecast for next week was lower.
Gas flows to the seven big U.S. LNG export plants fell to 11.6 bcfd so far in July after Freeport shut before Hurricane Beryl hit the Texas Coast on July 8, down from 12.8 bcfd in June and a monthly record high of 14.7 bcfd in December 2023.
Week ended July 19 Forecast | Week ended July 12 Actual | Year ago July 19 | Five-year average July 19 | ||
U.S. weekly natgas storage change (bcf): | +16 | +10 | +23 | +31 | |
U.S. total natgas in storage (bcf): | 3,225 | 3,209 | 2,982 | 2,775 | |
U.S. total storage versus 5-year average | 16.2% | 16.9% | |||
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 | 2.13 | 2.19 | 2.64 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 10.21 | 9.99 | 9.58 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 12.01 | 12.10 | 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 | 4 | 4 | 1 | 2 | 3 |
U.S. GFS CDDs | 243 | 243 | 234 | 212 | 203 |
U.S. GFS TDDs | 244 | 247 | 235 | 214 | 206 |
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 | 102.4 | 102.6 | 102.3 | 95.5 |
U.S. Imports from Canada | 7.9 | 7.6 | 7.7 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 110.2 | 110.0 | 110.3 | N/A | 112.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.8 | 1.7 | 1.8 | N/A | 2.3 |
U.S. Exports to Mexico | 7.2 | 7.2 | 7.1 | N/A | 6.1 |
U.S. LNG Exports | 11.0 | 11.9 | 12.7 | 12.6 | 8.6 |
U.S. Commercial | 4.4 | 4.4 | 4.4 | 4.4 | 4.5 |
U.S. Residential | 3.5 | 3.5 | 3.7 | 3.5 | 3.6 |
U.S. Power Plant | 49.1 | 47.5 | 47.0 | 48.3 | 43.3 |
U.S. Industrial | 21.7 | 21.6 | 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 | 2.2 | 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 | 84.5 | 84.2 | 84.8 | 79.9 |
Total U.S. Demand | 106.2 | 105.2 | 105.8 | 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 | 4 | 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 | 48 | 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 | 2.13 | 2.19 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.54 | 1.54 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.61 | 3.75 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.40 | 1.40 | |||
Chicago Citygate NG-CG-CH-SNL | 1.90 | 1.83 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.74 | 1.75 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.85 | 2.83 | |||
Waha Hub NG-WAH-WTX-SNL | 1.06 | 0.94 | |||
AECO NG-ASH-ALB-SNL | 0.79 | 0.77 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 39.25 | 38.50 | |||
PJM West EL-PK-PJMW-SNL | 52.00 | 55.50 | |||
Ercot North EL-PK-ERTN-SNL | 24.50 | 23.75 | |||
Mid C EL-PK-MIDC-SNL | 70.33 | 73.00 | |||
Palo Verde EL-PK-PLVD-SNL | 86.00 | 81.00 | |||
SP-15 EL-PK-SP15-SNL | 62.00 | 72.25 |
Reporting by Scott DiSavino, Editing by Nick Zieminski
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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