Credit: REUTERS/NICK OXFORDAdds latest prices
Sept 20 (Reuters) - U.S. natural gas futures slid about 1% to a fresh six-week low on Tuesday on near record output and forecasts for less demand next week than previously expected.
Prices were also held in check on expectations demand would decline next month when the Cove Point liquefied natural gas (LNG) plant in Maryland shuts for a couple weeks of maintenance in October.
U.S. gas use has already been reduced for months by the ongoing outage at the Freeport LNG export plant in Texas which has left more gas in the United States for utilities to inject into stockpiles for next winter.
Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November.
In Puerto Rico, meanwhile, LUMA Energy was slowly restoring electric service after Hurricane Fiona caused an island-wide power outage on Sunday. [nL1N30R1IJ]
Front-month gas futures NGc1 fell 3.5 cents, or 0.5%, to settle at $7.717 per million British thermal units (mmBtu), their lowest close since Aug. 8 for a third day in a row.
That was also the first time the front-month declined for four consecutive days since December 2021.
In the spot gas market, the premium of the Henry Hub benchmark NG-W-HH-SNL in Louisiana over the Waha hub NG-WAH-WTX-SNL in the Permian Shale in Texas rose to $2.71 per mmBtu on Tuesday, its highest since October 2020 as pipeline maintenance limits the amount of gas that can exit the Waha producing basin.
That compares with an average premium of Henry Hub over Waha of $1.30 per mmBtu so far in September, 63 cents so far in 2022, $1.33 in 2021 and a five-year (2016-2020) average of 80 cents.
Despite recent declines, gas futures were still up about 107% so far this year as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine.
Gas was trading around $56 per mmBtu in Europe TRNLTTFMc1 and $43 in Asia JKMc1. That was a 9% increase in European prices.
Russian gas exports via the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route - have averaged just 1.3 bcfd so far in September, down from 2.5 bcfd in August and 10.8 bcfd in September 2021. NG/EU
TOP PRODUCER
U.S. gas futures lag far behind global prices because the United States is the world's top producer with all the fuel it needs for domestic use, while capacity constraints and the Freeport outage prevent the country from exporting more LNG.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.9 bcfd so far in September from a record 98.0 bcfd in August.
With the coming of cooler autumn weather, Refinitiv projected average U.S. gas demand, including exports, would slip from 91.6 bcfd this week to 90.1 bcfd next week. The forecast for next week was a little lower than Refinitiv's outlook on Monday.
The average amount of gas flowing to U.S. LNG export plants rose to 11.3 bcfd so far in September from 11.0 bcfd in August. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG.
Week ended Sep 16 (Forecast)
Week ended Sep 9 (Actual)
Year ago Sep 16
Five-year average Sep 16
U.S. weekly natgas storage change (bcf):
+83
+77
+77
+81
U.S. total natgas in storage (bcf):
2,854
2,771
3,071
3,206
U.S. total storage versus 5-year average
-11.0%
-11.3%
Global Gas Benchmark Futures ($ per mmBtu)
Current Day
Prior Day
This Month Last Year
Prior Year Average 2021
Five Year Average (2017-2021)
Henry Hub NGc1
7.84
7.75
5.11
3.73
2.89
Title Transfer Facility (TTF) TRNLTTFMc1
54.09
51.55
22.61
16.04
7.49
Japan Korea Marker (JKM) JKMc1
41.97
42.16
23.35
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
38
39
25
44
58
U.S. GFS CDDs
110
109
98
104
89
U.S. GFS TDDs
148
148
123
148
147
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
98.8
98.3
98.9
93.5
87.0
U.S. Imports from Canada
7.7
8.0
8.0
8.3
7.7
U.S. LNG Imports
0.0
0.0
0.0
0.0
0.1
Total U.S. Supply
106.5
106.4
106.9
101.8
95.8
U.S. Demand (bcfd)
U.S. Exports to Canada
2.4
2.2
2.2
2.5
2.4
U.S. Exports to Mexico
5.5
5.3
5.5
5.9
5.3
U.S. LNG Exports
11.3
11.5
10.9
10.1
4.9
U.S. Commercial
4.7
4.8
5.2
4.9
4.9
U.S. Residential
3.7
3.9
4.6
4.2
3.9
U.S. Power Plant
37.1
35.8
33.2
31.5
33.2
U.S. Industrial
21.3
21.3
21.6
20.8
21.2
U.S. Plant Fuel
4.9
4.9
4.9
4.9
4.9
U.S. Pipe Distribution
2.0
1.9
1.9
1.9
2.1
U.S. Vehicle Fuel
0.1
0.1
0.1
0.1
0.1
Total U.S. Consumption
73.8
72.7
71.6
68.3
70.3
Total U.S. Demand
93.0
91.6
90.1
86.8
82.9
U.S. weekly power generation percent by fuel - EIA
Week ended Sep 23
Week ended Sep 16
Week ended Sep 9
Week ended Sep 2
Week ended Aug 26
Wind
11
8
6
7
5
Solar
4
3
3
3
3
Hydro
5
5
6
5
6
Other
2
2
2
2
2
Petroleum
Natural Gas
39
42
45
44
44
Coal
19
19
21
21
22
Nuclear
20
19
18
17
18
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub
Current Day
Prior Day
Henry Hub NG-W-HH-SNL
7.96
8.11
Transco Z6 New York NG-CG-NY-SNL
7.30
6.90
PG&E Citygate NG-CG-PGE-SNL
8.58
8.65
Dominion South NG-PCN-APP-SNL
6.91
6.76
Chicago Citygate NG-CG-CH-SNL
6.98
6.95
Algonquin Citygate NG-CG-BS-SNL
7.25
7.00
SoCal Citygate NG-SCL-CGT-SNL
7.47
7.22
Waha Hub NG-WAH-WTX-SNL
5.25
6.51
AECO NG-ASH-ALB-SNL
3.22
2.84
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
Prior Day
New England EL-PK-NPMS-SNL
79.75
57.50
PJM West EL-PK-PJMW-SNL
148.25
92.25
Ercot North EL-PK-ERTN-SNL
94.75
61.00
Mid C EL-PK-MIDC-SNL
100.25
81.25
Palo Verde EL-PK-PLVD-SNL
65.25
46.75
SP-15 EL-PK-SP15-SNL
65.00
44.50
(Reporting by Scott DiSavino; Editing by Mark Porter and Chizu Nomiyama)
((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.
