By Scott DiSavino
May 21 (Reuters) - U.S. natural gas futures eased about 1% on Tuesday on signs producers were no longer cutting output and worries the bankruptcy of a contractor working on Exxon Mobil/QatarEnergies' Golden Pass LNG export plant in Texas could delay the project and reduce expected demand for gas next year.
Zachry Holdings , one of the companies building Golden Pass, filed for bankruptcy citing challenges at the project. Analysts have already shifted their expected startup of the project from the first half of 2025 to the second half of 2025.
In addition, traders said gas futures were down as speculators cash in their long bets after prices soared about 63% over the prior three weeks to a four-month high in the prior session.
Front-month gas futures for June delivery on the New York Mercantile Exchange fell 1.3 cents, or 0.5%, to $2.738 per million British thermal units (mmBtu) at 10:39 a.m. EDT (1439 GMT). On Monday, the contract closed at its highest since Jan. 17.
Despite the small price decline, the front-month remained in technically overbought territory for a 13th day in a row for the first time since April 2022.
In other news, more than 146,000 homes and businesses in Texas were still without power on Tuesday after severe storms battered the region last week and over the weekend.
Power demand in the Electric Reliability Council of Texas (ERCOT) region, meanwhile, hit a preliminary record high for the month of May on Monday and will likely keep breaking that high over the next week as homes and businesses keep their air conditioners cranked up to escape a spring heat wave.
In Massachusetts, utility regulators last week approved a deal between U.S. energy company Constellation Energy and some New England gas utilities that will keep the Everett LNG import plant in service through 2030 to help keep the regional gas system reliable and meet growing demand, especially during the peak winter heating seasons.
In the spot market, next-day gas prices at the Henry Hub benchmark in Louisiana rose to their highest since January due to rising air conditioning use. That left prices at the PG&E Citygate in Northern California this week less expensive than the Henry Hub for the first time since March 2022.
Energy traders said that was because demand for gas was low in California, while melting snow in the West was resulting in lots of cheap hydropower.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.3 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. The May average was up from 97.2 bcfd on Monday, which traders said could be a sign that the high prices were prompting driller to slowly start producing more gas.
Meteorologists projected weather across the Lower 48 states would be warmer than normal from May 21-27 and then again from June 2-5 with a near normal stretch in the middle from May 28-June 1.
LSEG forecast gas demand in the Lower 48, including exports, would rise from 91.5 bcfd this week to 92.3 next week.
Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 bcfd in April to 12.7 bcfd so far in May with the return of Freeport LNG's 2.1-bcfd plant in Texas. That compares with a monthly record high of 14.7 bcfd in December.
Week ended Week ended Year ago Five-year
May 17 May 10 May 17 average
Forecast Actual May 17
U.S. weekly natgas storage change (bcf): +89 +70 +97 +92
U.S. total natgas in storage (bcf): 2,722 2,633 2,309 2,105
U.S. total storage versus 5-year average 29.3% 30.8%
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 2.80 2.75 2.30 2.66 3.60
Title Transfer Facility (TTF) 10.06 10.12 9.97 13.04 14.39
Japan Korea Marker (JKM) 11.51 11.05 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 20 19 27 39 40
U.S. GFS CDDs 130 130 91 107 107
U.S. GFS TDDs 150 149 118 146 147
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 97.5 97.5 97.3 102.6 94.4
U.S. Imports from Canada 7.1 7.2 6.9 7.4 7.5
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0
Total U.S. Supply 104.6 104.7 104.2 110.0 101.9
U.S. Demand (bcfd)
U.S. Exports to Canada 1.8 1.8 1.7 2.6 2.4
U.S. Exports to Mexico 6.6 5.3 6.3 6.1 5.6
U.S. LNG Exports 12.8 13.0 12.9 12.8 8.8
U.S. Commercial 5.2 4.7 4.7 4.9 5.8
U.S. Residential 5.0 4.2 4.2 4.5 6.9
U.S. Power Plant 32.3 34.1 34.1 32.1 28.4
U.S. Industrial 21.7 21.6 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 71.1 71.4 71.4 69.6 69.4
Total U.S. Demand 92.3 91.5 92.3 91.1 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 79 79 83 107 81
Jan-Jul 80 79 77 102 79
Oct-Sep 81 81 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
May 24 May 17 May 10 May 3 Apr 26
Wind 10 13 14 16
Solar 6 6 6 6
Hydro 8 7 7 7
Other 1 1 1 2
Petroleum 0 0 0 0
Natural Gas 40 41 40 37
Coal 14 14 13 13
Nuclear 20 19 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 2.52 2.44
Transco Z6 New York 1.85 1.45
PG&E Citygate 2.45 2.34
Eastern Gas (old Dominion South) 1.70 1.46
Chicago Citygate 2.05 1.85
Algonquin Citygate 2.02 1.57
SoCal Citygate 1.74 1.38
Waha Hub 0.15 1.62
AECO 0.93 0.86
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 31.25 28.75
PJM West 50.50 40.00
Ercot North 32.25 34.00
Mid C 15.81 12.25
Palo Verde 3.50 4.50
SP-15 0.50 2.75
(Reporting by Scott DiSavino; Editing by David Gregorio)
((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 ))
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