Credit: REUTERS/Adrees LatifAdds latest prices, Freeport in lead sentence
June 13 (Reuters) - U.S. natural gas futures fell about 5% to a near two-week low with the decline in other energy futures on Monday as the shutdown of the Freeport liquefied natural gas (LNG) export plant last week cut U.S. demand for gas, leaving more of the fuel available to refill low stockpiles.
That gas price decline came even though power demand in Texas hit an all-time high on Sunday and will likely break that record on Monday as economic growth boosts usage and homes and businesses keep air conditioners cranked up to escape a lingering heatwave.
Freeport shut on June 8 after a pipe burst, according to energy research firm IIR Energy and others. Freeport LNG, the plant owner, has said that the plant would be down for at least three weeks of maintenance.
Analysts projected that the Freeport shutdown would reduce the amount of gas available to the rest of the world, especially in Europe where most U.S. LNG has gone in recent months as countries look to wean themselves off Russian supplies after Moscow's invasion of Ukraine.
But leaving more gas in the United States should give utilities a chance to rebuild extremely low U.S. stockpiles more quickly. Freeport, the second-biggest U.S. LNG export plant, consumes about 2 billion cubic feet per day (bcfd) of gas, so a three-week shutdown would result in about 42 billion cubic feet (bcf) more gas being available to the U.S. market.
U.S. storage was currently about 15%, or 340 bcf, below normal levels for this time of year, its lowest since April 2019. EIA/GASNGAS/POLL
Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange (NYMEX) fell 40.9 cents, or 4.6%, to $8.441 per million British thermal units (mmBtu) at 11:20 a.m. EDT (1520 GMT), their lowest since May 31.
Oil futures CLc1 fell about 2% as a flare-up in COVID-19 cases in Beijing and worries about more interest rate hikes raised concern about demand. O/R
With the U.S. Federal Reserve expected to keep raising interest rates in coming months to reduce inflation, open interest in NYMEX futures NG-TOT fell to its lowest since September 2016 for a second day in a row on Friday as investors cut back on risky assets like commodities.
U.S. gas futures were up about 126% so far this year as much higher prices in Europe and Asia keep demand for U.S. liquefied natural gas (LNG) exports strong, especially since Russia's Feb. 24 invasion of Ukraine stoked fears Moscow might cut gas supplies to Europe.
Gas was trading around $25 per mmBtu in Europe TRNLTTFMc1 and $23 in Asia JKMc1. NG/EU
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U.S. futures lag far behind global prices because the United States is the world's top producer, with all the gas it needs for domestic use, while capacity constraints inhibit additional LNG exports.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 95.0 billion cubic feet per day (bcfd) so far in June from 95.1 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021.
With hotter weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise from 92.2 bcfd this week to 92.9 bcfd next week. The forecast for this week was lower than Refinitiv's outlook on Friday.
The average amount of gas flowing to U.S. LNG export plants fell to 11.9 bcfd so far in June from 12.5 bcfd in May, according to data from Refinitiv. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.6 bcfd of gas into LNG.
Week ended Jun 10 (Forecast)
Week ended Jun 3 (Actual)
Year ago Jun 10
Five-year average Jun 10
U.S. weekly natgas storage change (bcf):
+90
+97
+28
+79
U.S. total natgas in storage (bcf):
2,089
1,999
2,425
2,418
U.S. total storage versus 5-year average
-13.6%
-14.5%
Global Gas Benchmark Futures ($ per mmBtu)
Current Day
Prior Day
This Month Last Year
Prior Year Average 2021
Five Year Average (2017-2021)
Henry Hub NGc1
8.63
8.85
3.27
3.73
2.89
Title Transfer Facility (TTF) TRNLTTFMc1
25.79
25.53
10.27
16.04
7.49
Japan Korea Marker (JKM) JKMc1
23.17
23.16
11.58
18.00
8.95
Refinitiv 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
8
9
5
10
12
U.S. GFS CDDs
202
192
183
168
161
U.S. GFS TDDs
210
201
188
178
173
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week
Current Week
Next Week
This Week Last Year
Five-Year Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production
94.9
95.3
95.6
92.0
84.6
U.S. Imports from Canada
7.9
7.9
7.3
7.8
7.7
U.S. LNG Imports
0.0
0.0
0.0
0.0
0.1
Total U.S. Supply
102.8
103.2
102.9
99.8
92.4
U.S. Demand (bcfd)
U.S. Exports to Canada
2.6
2.4
2.4
2.1
2.2
U.S. Exports to Mexico
6.0
6.1
6.1
5.3
5.1
U.S. LNG Exports
12.3
10.9
11.7
9.6
4.3
U.S. Commercial
4.6
4.4
4.4
4.4
4.7
U.S. Residential
3.9
3.7
3.7
3.5
4.3
U.S. Power Plant
33.2
37.1
37.0
36.3
32.8
U.S. Industrial
20.7
20.9
20.8
20.7
20.9
U.S. Plant Fuel
4.7
4.7
4.7
4.7
4.7
U.S. Pipe Distribution
1.8
1.9
1.9
1.9
1.8
U.S. Vehicle Fuel
0.1
0.1
0.1
0.1
0.1
Total U.S. Consumption
69.0
72.9
72.7
71.6
69.3
Total U.S. Demand
89.9
92.2
92.9
88.6
80.9
U.S. weekly power generation percent by fuel - EIA
Week ended Jun 17
Week ended Jun 10
Week ended Jun 3
Week ended May 27
Week ended May 20
Wind
9
8
12
12
12
Solar
5
5
4
4
4
Hydro
8
7
7
7
7
Other
2
2
2
2
2
Petroleum
Natural Gas
41
41
36
37
37
Coal
20
20
19
20
20
Nuclear
19
19
19
19
19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub
Current Day
Prior Day
Henry Hub NG-W-HH-SNL
8.78
8.16
Transco Z6 New York NG-CG-NY-SNL
7.55
7.37
PG&E Citygate NG-CG-PGE-SNL
9.81
9.27
Dominion South NG-PCN-APP-SNL
7.56
7.l6
Chicago Citygate NG-CG-CH-SNL
8.30
7.89
Algonquin Citygate NG-CG-BS-SNL
7.65
7.51
SoCal Citygate NG-SCL-CGT-SNL
9.23
9.69
Waha Hub NG-WAH-WTX-SNL
7.91
7.67
AECO NG-ASH-ALB-SNL
6.29
6.00
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
New England EL-PK-NPMS-SNL
66.50
68.25
PJM West EL-PK-PJMW-SNL
79.75
91.50
Ercot North EL-PK-ERTN-SNL
100.00
141.25
Mid C EL-PK-MIDC-SNL
0.30
7.67
Palo Verde EL-PK-PLVD-SNL
80.50
92.75
SP-15 EL-PK-SP15-SNL
80.75
90.00
(Reporting by Scott DiSavino; Editing by William Maclean and Mark Porter)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
