Aug 12 (Reuters) - U.S. natural gas futures fell to a fresh one-week low on Thursday on forecasts for slightly less hot weather and lower air conditioning demand this week than previously expected.
That decline also came after federal data showed last week's storage build was bigger than usual due to mild weather and a decline in exports.
The U.S. Energy Information Administration $(EIA)$ said utilities added 49 billion cubic feet (bcf) of gas into storage during the week ended Aug. 6.
That matched the build analysts forecast in a Reuters poll and compares with an increase of 55 bcf in the same week last year and a five-year (2016-2020) average increase of 42 bcf.
Last week's injection boosted stockpiles to 2.776 trillion cubic feet (tcf), or 6.0% below the five-year average of 2.954 tcf for this time of year.
Front-month gas futures fell 5.9 cents, or 1.5%, to $4.000 per million British thermal units (mmBtu) at 10:38 a.m. EDT (1438 GMT), putting the contract on track for its lowest close since Aug. 2.
In the power market, the Electric Reliability Council of Texas (ERCOT), grid operator for most of the state, projected hot weather Thursday would push peak demand over the current high for the year of 72,856 megawatts $(MW)$ set on July 26. That, however, is below the grid's all-time high of 74,820 MW set in August 2019.
In the U.S. Pacific Northwest, power prices at the Mid Columbia hub in Washington state slipped to $123 per megawatt hour for Thursday from $174 for Wednesday. High temperatures in Portland, Oregon, were expected to top 100 degrees Fahrenheit (38 Celsius) on Aug. 11-13. The city's normal high is 80 F at this time of year.
In the Atlantic basin, meanwhile, Tropical Depression Fred was expected to strengthen into a storm as it marches toward the South Florida area on Saturday.
Data provider Refinitiv said gas output in the U.S. Lower 48 states rose to an average of 92.0 billion cubic feet per day (bcfd) so far in August from 91.6 bcfd in July. That compares with an all-time high of 95.4 bcfd in November 2019.
With hot weather remaining through late August and liquefied natural gas $(LNG.AU)$ exports expected to increase as units return from maintenance work, Refinitiv projected average U.S. gas demand, including exports, would rise from 92.3 bcfd this week to 93.0 bcfd next week. The forecast for this week, however, was lower than Refinitiv expected on Wednesday due to less hot weather.
The amount of gas flowing to U.S. LNG export plants slipped to an average of 10.2 bcfd so far in August, due mostly to what were expected to be short-term reductions at the Cameron and Sabine plants in Louisiana and Freeport in Texas, down from 10.8 bcfd in July and a record 11.5 bcfd in April.
But with European and Asian gas both trading over $15 per mmBtu, compared with just $4 for the U.S. fuel, analysts said buyers around the world would keep purchasing all the LNG the United States can produce. Prices at the Title Transfer Facility $(TTF)$ in the Netherlands, the European benchmark, hit a record high for a second day in a row on Wednesday.
U.S. pipeline exports to Mexico have slipped to an average of 6.3 bcfd so far in August from 6.6 bcfd in July and a record 6.7 bcfd in June.
Week ended Week ended Year ago Five-year
Aug 6 Jul 30 Aug 6 average
(Actual) (Actual) Aug 6
U.S. weekly natgas storage change (bcf): +49 +13 +55 +42
U.S. total natgas in storage (bcf): 2,776 2,727 3,324 2,954
U.S. total storage versus 5-year average -6.0% -6.4%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2020 (2016-2020)
Henry Hub 4.04 4.08 2.34 2.13 2.66
Title Transfer Facility (TTF) 15.94 15.41 2.83 3.24 5.19
Japan Korea Marker (JKM) 15.65 15.80 3.46 4.22 6.49
Refinitiv 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 2 2 1 4 5
U.S. GFS CDDs 227 229 220 194 185
U.S. GFS TDDs 229 231 221 198 190
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Week Next Week This Week Five-Year
Last Year Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 92.0 92.1 92.2 90.4 82.2
U.S. Imports from Canada 6.9 7.2 7.3 7.6 8.1
U.S. LNG Imports 0.0 0.0 0.0 0.1 0.2
Total U.S. Supply 98.9 99.3 99.5 98.1 90.5
U.S. Demand (bcfd)
U.S. Exports to Canada 2.2 2.4 2.4 1.9 2.3
U.S. Exports to Mexico 6.2 6.3 6.4 5.6 4.9
U.S. LNG Exports 10.6 10.0 10.6 4.6 2.7
U.S. Commercial 4.4 4.4 4.5 4.4 4.5
U.S. Residential 3.5 3.5 3.6 3.5 3.3
U.S. Power Plant 36.8 38.1 37.9 43.0 38.2
U.S. Industrial 20.9 21.0 21.0 21.5 21.0
U.S. Plant Fuel 4.5 4.5 4.6 4.5 4.5
U.S. Pipe Distribution 1.9 2.0 2.0 1.9 1.9
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 72.3 73.7 73.5 78.9 73.5
Total U.S. Demand 91.2 92.3 93.0 91.0 83.4
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 4.07 4.12
Transco Z6 New York 4.05 4.07
PG&E Citygate 5.43 5.55
Dominion South 3.72 3.75
Chicago Citygate 3.90 3.97
Algonquin Citygate 4.85 4.52
SoCal Citygate 7.45 7.15
Waha Hub 3.88 3.90
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 97.25 65.75
PJM West 42.75 43.50
Ercot North 52.25 47.00
Mid C 122.29 135.33
Palo Verde 91.50 92.00
SP-15 87.25 96.25