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U.S. natgas eases from 7-week high on milder weather forecasts

Credit: REUTERS/ANGUS MORDANT

U.S. natural gas futures eased on Friday from a seven-week high in the previous session on forecasts for the weather to moderate over the next two weeks.

By Scott DiSavino

April 23 (Reuters) - U.S. natural gas futures eased on Friday from a seven-week high in the previous session on forecasts for the weather to moderate over the next two weeks.

That small decline came despite a smaller-than-expected storage build, record exports and small declines in production.

Traders also noted that colder-than-normal weather this week boosted heating demand by so much that utilities could take the unusual step of pulling gas from storage. The last time utilities pulled gas from storage in April was in 2018.

Front-month gas futures NGc1 fell 1.9 cents, or 0.7%, to settle at $2.730 per million British thermal units. On Thursday, the contract closed at its highest since March 3.

For the week, the front-month was up about 2% after rising 6% last week.

Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 91.4 billion cubic feet per day (bcfd) so far in April, down from 91.5 bcfd in March. That compares with a record monthly high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would fall from 98.1 bcfd this week to 90.5 bcfd next week and 87.6 bcfd in two weeks as the weather turns seasonally milder. The forecast for next week was higher than Refinitiv projected on Thursday.

The amount of gas flowing to U.S. LNG export plants averaged 11.5 bcfd so far in April, which would top the monthly record of 11.2 bcfd in March.

Analysts said LNG feedgas looks set to break March's record in April even though flows were expected to decline later this month due to planned work on a couple of facilities and the pipelines serving them, including Cheniere Energy Inc's LNG.A plants in Texas and Louisiana and Cameron LNG's plant in Louisiana.

U.S. pipeline exports to Mexico, meanwhile, averaged 6.1 bcfd so far in April, up from 5.9 bcfd in March and on track to top the monthly record of 6.0 bcfd in September 2020, according to Refinitiv data.

Week ended Apr 23 (Forecast)

Week ended Apr 16 (Actual)

Year ago Apr 23

Five-year average Apr 23

U.S. natgas storage (bcf):

+19

+38

+66

+67

Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2020

Five Year Average (2016-2020)

Henry Hub NGc1

2.75

2.67

1.76

2.13

2.66

Title Transfer Facility (TTF) TRNLTTFMc1

7.14

7.61

2.11

3.24

5.19

Japan Korea Marker (JKM) JKMc1

8.55

8.55

2.46

4.22

6.49

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

103

106

129

120

115

U.S. GFS CDDs

52

50

47

47

42

U.S. GFS TDDs

155

156

176

167

157

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

91.5

90.4

90.5

91.4

80.8

U.S. Imports from Canada

6.4

7.1

6.7

6.7

8.0

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.1

Total U.S. Supply

97.9

97.5

97.2

98.1

88.9

U.S. Demand (bcfd)

U.S. Exports to Canada

2.6

2.2

2.3

2.5

2.6

U.S. Exports to Mexico

6.6

6.2

6.1

4.6

4.1

U.S. LNG Exports

11.0

11.6

11.5

8.0

3.2

U.S. Commercial

7.7

9.1

7.1

8.7

8.2

U.S. Residential

10.1

12.6

9.2

11.9

11.7

U.S. Power Plant

25.4

26.2

25.5

26.8

23.7

U.S. Industrial

22.6

23.4

22.3

22.7

21.8

U.S. Plant Fuel

4.5

4.5

4.5

4.5

4.5

U.S. Pipe Distribution

1.9

2.1

1.9

2.1

2.1

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

72.3

78.1

70.6

76.8

72.0

Total U.S. Demand

92.4

98.1

90.5

91.9

81.9

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

Hub

Current Day

Prior Day

Henry Hub NG-W-HH-SNL

2.77

2.72

Transco Z6 New York NG-CG-NY-SNL

2.21

2.57

PG&E Citygate NG-CG-PGE-SNL

3.83

3.94

Dominion South NG-PCN-APP-SNL

2.09

2.32

Chicago Citygate NG-CG-CH-SNL

2.64

2.67

Algonquin Citygate NG-CG-BS-SNL

2.55

4.15

SoCal Citygate NG-SCL-CGT-SNL

3.49

3.57

Waha Hub NG-WAH-WTX-SNL

2.45

2.47

SNL U.S. Power Next-Day Prices ($ per megawatt-hour)

Hub

Current Day

Prior Day

New England EL-PK-NPMS-SNL

25.50

33.75

PJM West EL-PK-PJMW-SNL

25.75

27.75

Ercot North EL-PK-ERTN-SNL

25.00

26.25

Mid C EL-PK-MIDC-SNL

34.25

35.00

Palo Verde EL-PK-PLVD-SNL

24.75

25.50

SP-15 EL-PK-SP15-SNL

25.75

27.50

(Reporting by Scott DiSavino; Editing by Kirsten Donovan)

((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.

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