U.S. natgas futures slip to 1-week low on falling oil prices

Credit: REUTERS/ANGUS MORDANT

U.S. natural gas futures fell to a one-week low on Wednesday as gas followed oil prices lower despite forecasts over the next two weeks for slightly hotter weather and higher air conditioning demand than previously expected.

Adds closing prices, oil futures

July 14 (Reuters) - U.S. natural gas futures fell to a one-week low on Wednesday as gas followed oil prices lower despite forecasts over the next two weeks for slightly hotter weather and higher air conditioning demand than previously expected.

Front-month gas futures NGc1 fell 3.6 cents, or 1.0%, to settle at $3.660 per million British thermal units (mmBtu), their lowest close since July 7.

U.S. oil futures CLc1 dropped over $2 a barrel on Wednesday after Saudi Arabia and the United Arab Emirates reached a compromise that should boost global oil supplies as the world recovers from the coronavirus pandemic. O/R

Data provider Refinitiv said U.S. output in the Lower 48 states slipped to 91.3 billion cubic feet per day (bcfd) so far in July, due mostly to pipeline problems in West Virginia earlier in the month. That compares with an average of 92.2 bcfd in June and an all-time high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would rise from 91.7 bcfd this week to 94.0 bcfd next week as the weather turns seasonally hotter. Those forecasts were higher than Refinitiv projected on Tuesday.

The amount of gas flowing to U.S. liquefied natural gas (LNG) export plants averaged 10.9 bcfd so far in July, up from 10.1 bcfd in June but still below the record 11.5 bcfd in April.

With European TRNLTTFMc1 and Asian JKMc1 gas trading near $12 and $13 per mmBtu, respectively, analysts said buyers around the world would keep purchasing all the LNG the United States can produce.

U.S. pipeline exports to Mexico, meanwhile, averaged 6.5 bcfd so far in July, down from a record 6.7 bcfd in June.

Week ended Jul 9 (Forecast)

Week ended Jul 2 (Actual)

Year ago Jul 9

Five-year average Jul 9

U.S. natgas storage (bcf):

+47

+16

+47

+54

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

3.71

3.68

1.76

2.13

2.66

Title Transfer Facility (TTF) TRNLTTFMc1

11.98

12.10

1.79

3.24

5.19

Japan Korea Marker (JKM) JKMc1

12.97

13.01

2.39

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

4

4

2

3

3

U.S. GFS CDDs

225

223

231

211

205

U.S. GFS TDDs

229

227

233

214

208

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

91.4

91.8

92.1

88.8

81.1

U.S. Imports from Canada

7.0

7.1

7.1

7.5

8.2

U.S. LNG Imports

0.0

0.0

0.0

0.1

0.2

Total U.S. Supply

98.5

98.9

99.2

96.4

89.5

U.S. Demand (bcfd)

U.S. Exports to Canada

2.3

2.3

2.3

2.5

2.2

U.S. Exports to Mexico

6.5

6.6

6.7

5.7

4.7

U.S. LNG Exports

11.0

10.8

11.1

3.5

2.7

U.S. Commercial

4.3

4.3

4.4

4.3

4.4

U.S. Residential

3.4

3.5

3.6

3.5

3.5

U.S. Power Plant

35.4

36.7

38.5

43.1

39.2

U.S. Industrial

20.6

20.8

20.8

21.5

20.6

U.S. Plant Fuel

4.5

4.5

4.6

4.6

4.5

U.S. Pipe Distribution

1.9

1.9

2.0

1.9

2.0

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

70.3

71.9

73.9

79.0

74.3

Total U.S. Demand

90.1

91.7

94.0

90.7

83.9

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

Hub

Current Day

Prior Day

Henry Hub NG-W-HH-SNL

3.78

3.70

Transco Z6 New York NG-CG-NY-SNL

3.61

3.47

PG&E Citygate NG-CG-PGE-SNL

5.15

5.14

Dominion South NG-PCN-APP-SNL

3.09

3.05

Chicago Citygate NG-CG-CH-SNL

3.54

3.55

Algonquin Citygate NG-CG-BS-SNL

3.40

3.28

SoCal Citygate NG-SCL-CGT-SNL

6.55

6.61

Waha Hub NG-WAH-WTX-SNL

3.31

3.35

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

Hub

Current Day

Prior Day

New England EL-PK-NPMS-SNL

41.50

34.50

PJM West EL-PK-PJMW-SNL

35.75

34.75

Ercot North EL-PK-ERTN-SNL

32.50

37.25

Mid C EL-PK-MIDC-SNL

25.57

52.00

Palo Verde EL-PK-PLVD-SNL

85.00

124.00

SP-15 EL-PK-SP15-SNL

74.25

123.25

(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.

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More