US natgas prices slip 2% on mild forecasts, rising storage levels
Adds latest prices
U.S. weather to remain mild through mid November
Gas stockpiles rising at faster-than-normal pace
NYMEX open interest hits record high
By Scott DiSavino
Nov 1 (Reuters) -U.S. natural gas futures slidabout 2% on Friday on forecasts for mild weather to continue through mid-November, keeping heating demand lower than usual for this time of year and allowing utilities to add more gas into storage for at least a few more weeks.
Front-month gas futures NGc1 for December delivery on the New York Mercantile Exchange (NYMEX) were down 4.4 cents, or 1.6%, to settle at $2.663 per million British thermal units (mmBtu).
Despite Friday'sprice decline, the front-month was still upabout 4% this week after climbing 13% last week.
Open interest in NYMEX futures, meanwhile, rose to a record 1.736 million contracts on Oct. 30, topping the prior all-time high of 1.700 million contracts in October 2018.
Analysts projected utilities added more gas to storage than usual this week for a third week in a row for the first time since October 2023, which should boost inventories to around 6% over the five-year average for the time of year. EIA/GAS NGAS/POLL
Prior to the past few weeks, storage injections through mid-Octoberhad been smaller than usual for 14 consecutive weeks because many producers reduced drilling activities this year after average spot monthly prices at the U.S. Henry Hub NG-W-HH-SNL benchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then.
In the spot market, pipeline constraints caused next-day gas prices at the Waha hub NG-WAH-WTX-SNL in the Permian Shale in West Texas to remain in negative territory for a record 42nd time this year.
Even though prices were negative six times in October, analysts have said they expect prices to mostly remain in positive territory now that the new Matterhorn gas pipe from the Permian to the Houston area is in service.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states eased to 101.3 billion cubic feet per day (bcfd) in October, down from 101.4 bcfd in September. That compared with a record 105.4 bcfd in December 2023.
On a daily basis, however, output was on track to drop by about 3.1 bcfd over the past four days to a preliminary four-month low of 99.8 bcfd on Friday. Analysts noted preliminary data was often revised later in the day.
With so many firms curtailing drilling activities, analysts projected average output in calendar 2024 will decline for the first time since 2020 when the COVID pandemic cut demand for the fuel.
Looking ahead, however, analysts projected producers would boost output later this year and in 2025 to meet rising liquefied natural gas (LNG) export demand with two new export plants - Venture Global LNG's Plaquemines in Louisiana and Cheniere Energy's LNG.N Corpus Christi stage 3 expansion in Texas - expected to start producing LNG later this year.
Meteorologists projected the weather in the Lower 48 states would remain warmer than normal through at least Nov. 16. But even warmer-than-normal weather in early November is cooler than warmer-than-normal weather in late October.
With seasonally cooler weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 99.1 bcfd this week to 100.4 bcfd next week and 104.8 bcfd in two weeks. The forecasts for this week and next were lower than LSEG's outlook on Thursday.
The amount of gas flowing to the seven big U.S. LNG export plants rose to an average of 13.1 bcfd in October, up from 12.7 bcfd in September. That compares with a monthly record high of 14.7 bcfd in December 2023.
Week ended Nov 1 Forecast | Week ended Oct 25 Actual | Year ago Nov 1 | Five-year average Nov 1 | ||
U.S. weekly natgas storage change (bcf): | +62 | +78 | +19 | +32 | |
U.S. total natgas in storage (bcf): | 3,925 | 3,863 | 3,775 | 3,717 | |
U.S. total storage versus 5-year average | 5.6% | 4.8% | |||
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 | 2.70 | 2.71 | 3.06 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 12.56 | 12.18 | 14.45 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 13.62 | 13.52 | 17.02 | 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 | 170 | 161 | 207 | 212 | 243 |
U.S. GFS CDDs | 27 | 30 | 26 | 23 | 16 |
U.S. GFS TDDs | 197 | 191 | 133 | 235 | 259 |
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 | 101.7 | 102.1 | 101.7 | 104.1 | 98.0 |
U.S. Imports from Canada | 7.8 | 8.2 | 7.8 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 109.5 | 110.3 | 1109.4 | N/A | 105.9 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 2.2 | 2.3 | 2.5 | N/A | 2.9 |
U.S. Exports to Mexico | 5.6 | 5.9 | 6.1 | N/A | 5.5 |
U.S. LNG Exports | 13.0 | 13.3 | 13.1 | 14.2 | 11.0 |
U.S. Commercial | 6.4 | 7.2 | 8.1 | 10.3 | 11.5 |
U.S. Residential | 7.0 | 8.7 | 10.6 | 14.8 | 16.8 |
U.S. Power Plant | 31.5 | 32.0 | 30.1 | 31.0 | 28.8 |
U.S. Industrial | 22.3 | 22.5 | 22.7 | 23.9 | 24.3 |
U.S. Plant Fuel | 5.0 | 5.0 | 5.0 | 5.1 | 5.3 |
U.S. Pipe Distribution | 2.0 | 2.1 | 2.1 | 2.1 | 3.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 74.3 | 77.6 | 78.7 | 87.3 | 90.0 |
Total U.S. Demand | 95.2 | 99.1 | 100.4 | N/A | 109.4 |
N/A is Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam | 2025 Current Day % of Normal Forecast | 2025 Prior Day % of Normal Forecast | 2024 % of Normal Actual | 2003 % of Normal Actual | 2022 % of Normal Actual |
Apr-Sep | 90 | 90 | 74 | 83 | 107 |
Jan-Jul | 87 | 87 | 76 | 77 | 102 |
Oct-Sep | 89 | 89 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Nov 1 | Week ended Oct 25 | 2023 | 2022 | 2021 | |
Wind | 15 | 14 | 10 | 11 | 10 |
Solar | 5 | 6 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 1 | 2 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 42 | 42 | 41 | 38 | 37 |
Coal | 14 | 14 | 17 | 21 | 23 |
Nuclear | 19 | 18 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 1.82 | 2.03 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.47 | 1.85 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.08 | 4.40 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.50 | 1.66 | |||
Chicago Citygate NG-CG-CH-SNL | 1.70 | 1.88 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.54 | 1.88 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.10 | 2.65 | |||
Waha Hub NG-WAH-WTX-SNL | -0.41 | -0.89 | |||
AECO NG-ASH-ALB-SNL | 0.51 | 0.68 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 38.75 | 48.50 | |||
PJM West EL-PK-PJMW-SNL | 38.25 | 35.50 | |||
Ercot North EL-PK-ERTN-SNL | 27.75 | 22.25 | |||
Mid C EL-PK-MIDC-SNL | 23.00 | 37.75 | |||
Palo Verde EL-PK-PLVD-SNL | 23.50 | 5.75 | |||
SP-15 EL-PK-SP15-SNL | 25.50 | 23.00 |
text_section_type="notes">For gas data on the LSEG terminal 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 LSEG 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
Reporting by Scott DiSavino; Editing by Kirsten Donovan and Paul Simao
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