(Adds latest prices)
By Scott DiSavino
May 15 (Reuters) - U.S. natural gas futures climbed about 3% to a 15-week high on Wednesday on a drop in output, a rise in feedgas to liquefied natural gas $(LNG)$ export plants since Freeport LNG returned to full service, and forecasts for warmer weather over the next two weeks than previously expected.
The warmer weather should boost the amount of gas power generators burn to produce electricity to keep air conditioners humming.
Traders said the futures price increase was kept in check by the tremendous oversupply of gas still in storage. Analysts forecast gas stockpiles were about 31% above normal levels for this time of year.
Front-month gas futures for June delivery on the New York Mercantile Exchange rose 7.2 cents, or 3.1%, to settle at $2.416 per million British thermal units (mmBtu), their highest close since Jan. 29.
That kept the front-month in technically overbought territory for a ninth day in a row for the first time since April 2022.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.1 billion cubic feet per day (bcfd) so far in May, down from 98.2 bcfd in April. That compares with a monthly record high of 105.5 bcfd in December 2023.
On a daily basis, output dropped by around 3.0 bcfd over the past three days to a preliminary 17-week low of 95.2 bcfd on Wednesday.
That put U.S. gas production down about 10% so far in 2024 after several energy firms, including EQT and Chesapeake Energy , delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March.
EQT is the biggest U.S. gas producer and Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy .
Meteorologists projected weather across the Lower 48 states would turn from near normal now to warmer than normal levels from May 18-30.
LSEG forecast gas demand in the Lower 48, including exports, would rise from 92.4 bcfd this week to 92.7 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 from an average of 11.9 bcfd in April to 12.6 bcfd so far in May with the return to full service of Freeport LNG's 2.1-bcfd export plant in Texas. That compares with a monthly record high of 14.7 bcfd in December.
But on a daily basis, LNG feedgas was on track to hold at 12.4 bcfd for a second day on Wednesday as flows to Freeport remain at an 11-month high of 2.1 bcfd for a third day because flows to Cheniere Energy's Sabine Pass in Louisiana fell to a seven-month low of 3.8 bcfd.
Week ended Week ended Year ago Five-year
May 10 May 3 May 10 average
Actual Actual May 10
U.S. weekly natgas storage change (bcf): +77 +79 +93 +90
U.S. total natgas in storage (bcf): 2,640 2,563 2,212 2,013
U.S. total storage versus 5-year average 31.1% 33.3%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2023 (2018-2022)
Henry Hub 2.36 2.34 2.30 2.66 3.60
Title Transfer Facility (TTF) 9.48 9.42 9.97 13.04 14.39
Japan Korea Marker (JKM) 10.45 10.45 10.45 14.39 14.31
LSEG Heating $(HDD.UK)$, Cooling $(CDD.AU)$ and Total (TDD) Degree Days
Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year
Norm Norm
U.S. GFS HDDs 28 30 39 56 52
U.S. GFS CDDs 115 109 81 89 93
U.S. GFS TDDs 143 139 120 145 145
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2019-2023)
Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 97.2 97.3 97.5 102.5 94.4
U.S. Imports from Canada 7.5 7.1 6.9 6.9 7.5
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0
Total U.S. Supply 104.7 104.4 104.4 109.7 101.9
U.S. Demand (bcfd)
U.S. Exports to Canada 2.1 1.9 1.9 2.8 2.4
U.S. Exports to Mexico 6.6 6.7 6.6 6.1 5.6
U.S. LNG Exports 12.4 12.8 12.5 12.8 8.8
U.S. Commercial 5.6 5.2 4.8 5.1 5.8
U.S. Residential 6.0 5.1 4.4 5.0 6.9
U.S. Power Plant 32.7 32.2 34.1 34.2 28.4
U.S. Industrial 21.8 21.7 21.5 21.3 21.5
U.S. Plant Fuel 4.8 4.8 4.8 4.8 4.8
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 72.9 71.0 71.7 72.4 69.4
Total U.S. Demand 94.1 92.4 92.7 94.1 86.2
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021
% of Normal % of Normal % of Normal % of Normal % of Normal
Forecast Forecast Actual Actual Actual
Apr-Sep 76 76 83 107 81
Jan-Jul 77 77 77 102 79
Oct-Sep 79 79 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
May 17 May 10 May 3 Apr 26 Apr 19
Wind 10 13 14 16 16
Solar 6 6 6 6 6
Hydro 8 7 7 7 7
Other 1 1 1 1 2
Petroleum 0 0 0 0 0
Natural Gas 40 41 40 37 37
Coal 14 14 13 13 13
Nuclear 20 19 19 19 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 2.14 2.11
Transco Z6 New York 1.49 1.46
PG&E Citygate 2.67 2.60
Eastern Gas (old Dominion South) 1.44 1.38
Chicago Citygate 1.80 1.71
Algonquin Citygate 1.63 1.53
SoCal Citygate 1.95 1.86
Waha Hub 0.17 -0.73
AECO 0.76 0.81
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 30.50 30.25
PJM West 41.50 36.25
Ercot North 20.00 75.00
Mid C 53.00 50.50
Palo Verde 17.50 16.50
SP-15 15.00 15.00
(Reporting by Scott DiSavino; Editing by Nick Zieminski and Leslie Adler)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))
((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: For next-day SNL U.S. gas prices, see: For next-day SNL U.S. power prices, see: For U.S. natgas price and storage polls, see: For U.S. nuclear power outages, see: For U.S. Northwest hydro power report, see: For U.S./Canada natural gas rig count vs Henry Hub futures price, see: For the U.S. natural gas speed guide, see: For the U.S. power speed guide, see: To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined ) plus (ICE Henry Hub options and futures combined divided by four) plus (NYMEX Henry Hub swaps options and futures combined divided by four) plus (NYMEX Henry Hub penultimate gas swaps divided by four) NYMEX Henry Hub options and futures combined NYMEX Henry Hub futures only ICE Henry Hub options and futures combined NYMEX Henry Hub swaps options and futures combined NYMEX Henry Hub Penultimate gas swaps ))
Comments