U.S. natgas holds near 7-month high on rising global oil and gas prices

Credit: REUTERS/ANGUS MORDANT

U.S. natural gas futures held near a seven-month high on Monday as global gas and oil prices continued to soar despite forecasts for weaker U.S. gas demand over the next two weeks than previously expected.

June 14 (Reuters) - U.S. natural gas futures held near a seven-month high on Monday as global gas and oil prices continued to soar despite forecasts for weaker U.S. gas demand over the next two weeks than previously expected.

Front-month gas futures NGc1 remained unchanged at $3.296 per million British thermal units at 9:54 a.m. EDT (1354 GMT). On Friday, the contract closed at its highest since Oct. 30, 2020.

U.S. oil futures rose to their highest since October 2018 in intraday trade earlier Monday. O/R

U.S. speculators boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges last week by the most since February to their highest since March as soaring global gas prices prompt buyers around the world to keep purchasing all the LNG the United States can produce.

Gas prices in Europe TRNLTTFMc1 and Asia JKMc1 both traded over $10 per mmBtu, with the Title Transfer Facility (TTF) in the Netherlands at its highest since January 2014.

In the power market, meanwhile, extreme heat blanketing California and the U.S. West caused regional prices for Monday to jump to their highest since the February freeze when gas pipelines and wind turbines froze in Texas, leaving millions without power.

Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 91.9 billion cubic feet per day (bcfd) so far in June, up from 91.0 bcfd in May but still well below the monthly record high of 95.4 bcfd in November 2019.

Even with warmer weather on the horizon, Refinitiv projected average gas demand, including exports, would hold around 89.9 bcfd this week and next as rising prices prompt power generators to burn more coal and less gas to keep air conditioners humming. Those demand forecasts were lower than Refinitiv projected on Friday.

The amount of gas flowing to U.S. LNG export plants slid to an average of 9.8 bcfd so far in June, down from 10.8 bcfd in May and an all-time high of 11.5 bcfd in April. Traders noted LNG feedgas was down due to short-term maintenance at the Sabine Pass and Cameron export plants in Louisiana and some of the pipelines that provide them with fuel.

U.S. pipeline exports to Mexico averaged 6.6 bcfd so far in June, putting them on track to top May's 6.2-bcfd record.

Week ended Jun 11 (Forecast)

Week ended Jun 4 (Actual)

Year ago Jun 11

Five-year average Jun 11

U.S. natgas storage (bcf):

+72

+98

+87

+86

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

3.29

3.26

1.70

2.13

2.66

Title Transfer Facility (TTF) TRNLTTFMc1

10.36

10.06

1.74

3.24

5.19

Japan Korea Marker (JKM) JKMc1

10.92

10.93

2.14

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

3

3

8

9

11

U.S. GFS CDDs

199

195

165

175

163

U.S. GFS TDDs

202

198

173

184

174

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

92.1

91.8

92.1

87.9

80.3

U.S. Imports from Canada

6.7

6.6

6.2

6.6

7.8

U.S. LNG Imports

0.0

0.0

0.0

0.

0.1

Total U.S. Supply

98.8

98.4

98.3

94.5

88.2

U.S. Demand (bcfd)

U.S. Exports to Canada

2.3

2.1

2.2

2.2

2.1

U.S. Exports to Mexico

6.6

6.4

6.4

5.3

4.5

U.S. LNG Exports

9.2

10.1

10.9

3.8

2.6

U.S. Commercial

4.5

4.4

4.3

4.5

4.6

U.S. Residential

3.8

3.6

3.5

3.8

4.2

U.S. Power Plant

34.2

35.3

34.7

31.0

32.1

U.S. Industrial

21.2

21.4

21.4

21.4

20.6

U.S. Plant Fuel

4.6

4.5

4.5

4.5

4.5

U.S. Pipe Distribution

1.9

1.9

1.9

1.9

1.7

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

70.3

71.3

70.5

67.2

67.8

Total U.S. Demand

88.4

89.8

89.9

78.5

77.0

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

Hub

Current Day

Prior Day

Henry Hub NG-W-HH-SNL

3.23

3.13

Transco Z6 New York NG-CG-NY-SNL

2.07

2.30

PG&E Citygate NG-CG-PGE-SNL

4.09

3.81

Dominion South NG-PCN-APP-SNL

2.03

1.99

Chicago Citygate NG-CG-CH-SNL

3.16

3.07

Algonquin Citygate NG-CG-BS-SNL

2.15

2.38

SoCal Citygate NG-SCL-CGT-SNL

4.45

3.44

Waha Hub NG-WAH-WTX-SNL

3.15

2.90

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

Hub

Current Day

Prior Day

New England EL-PK-NPMS-SNL

35.50

32.25

PJM West EL-PK-PJMW-SNL

42.25

38.00

Ercot North EL-PK-ERTN-SNL

84.00

32.00

Mid C EL-PK-MIDC-SNL

77.50

35.25

Palo Verde EL-PK-PLVD-SNL

157.67

31.67

SP-15 EL-PK-SP15-SNL

155.00

30.25

(Reporting by Scott DiSavino; editing by Jonathan Oatis)

((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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