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Dec 27, 2023

UPDATE 2

(Adds latest prices) Aug 24 (Reuters) - U.S. natural gas futures edged up about 1% on Thursday on a much smaller-than-expected storage build last week when power generators burned lots of gas to keep

(Adds latest prices) Aug 24 (Reuters) - U.S. natural gas futures edged up about 1% on Thursday on a much smaller-than-expected storage build last week when power generators burned lots of gas to keep air conditioners humming during an extreme heat wave. The U.S. Energy Information Administration (EIA) said utilities added just 18 billion cubic feet (bcf) of gas into storage during the week ended Aug. 18. That was much smaller than the 33-bcf build analysts forecast in a Reuters poll due primarily to gas withdrawals in the hot South Central Region, which includes Texas. That compares with an increase of 54 bcf in the same week last year and a five-year (2018-2022) average increase of 49 bcf. Last week's increase boosted stockpiles to 3.083 trillion cubic feet (tcf), or 9.5% above the five-year average of 2.815 tcf for the time of year. With last week's heat wave continuing into this week in the central U.S., power demand was on track to hit record highs in the 15-state Midcontinent Independent System Operator (MISO) territory from Minnesota to Louisiana on Thursday and the Electric Reliability Council of Texas (ERCOT) grid in Texas on Friday. Both MISO and ERCOT forecast power supplies could fall short of projected demand plus required reserves on Thursday. Extreme heat boosts the amount of gas burned to produce power for cooling, especially in Texas, which gets most of its electricity from gas-fired plants. In 2022, about 49% of the state's power came from gas-fired plants, with most of the rest coming from wind (22%), coal (16%), nuclear (8%) and solar (4%), federal energy data showed. Front-month gas futures for September delivery on the New York Mercantile Exchange rose 2.2 cents, 0.9%, to settle at $2.519 per million British thermal units (mmBtu). That price increase was limited by forecasts for less hot weather and gas demand next week than previously expected and a drop in global gas prices following a deal between Australian energy company Woodside Energy and unions that should keep liquefied natural gas (LNG) exports flowing from Australia. That Woodside news helped drive gas prices in Europe, which consumes a lot of LNG, down about 25% over the past two days to a two-week low of around $10 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark. The U.S. National Hurricane Center (NHC), meanwhile, forecast a tropical cyclone could form in the Caribbean Sea or Gulf of Mexico over the next week. SUPPLY AND DEMAND Data provider Refinitiv said average gas output in the U.S. Lower 48 states had eased to 101.6 billion cubic feet per day (bcfd) so far in August from 101.8 bcfd in July. That compares with a monthly record of 102.2 bcfd in May. Meteorologists forecast the weather in the Lower 48 states will remain mostly hotter than normal through at least Sept. 8. Refinitiv forecast U.S. gas demand, including exports, would hold around 104.0 bcfd this week and next. The forecast for next week was lower than Refinitiv's outlook on Wednesday. Gas flows to the seven big U.S. LNG export plants fell from an average of 12.7 bcfd in July to 12.2 bcfd so far in August due mostly to reductions at Cheniere Energy's Sabine Pass in Louisiana and Corpus Christi in Texas. That compares with a monthly record of 14.0 bcfd in April. Week ended Week ended Year ago Five-year Aug 18 Aug 11 Aug 18 average Actual Actual Aug 18 U.S. weekly natgas storage change (bcf): 18 35 54 49 U.S. total natgas in storage (bcf): 3,083 3,065 2,570 2,815 U.S. total storage versus 5-year average 10.8% 9.5% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.45 2.50 8.78 6.54 2.89 Title Transfer Facility (TTF) 10.46 11.62 69.68 40.50 7.49 Japan Korea Marker (JKM) 13.74 14.30 53.22 34.11 8.95 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year Norm Norm U.S. GFS HDDs 4 3 1 7 11 U.S. GFS CDDs 212 223 200 180 162 U.S. GFS TDDs 216 226 201 187 173 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 101.4 101.2 101.3 98.2 92.0 U.S. Imports from Canada 7.0 7.2 7.3 8.6 8.1 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 108.4 108.4 108.6 106.8 100.8 U.S. Demand (bcfd) U.S. Exports to Canada 1.3 1.4 1.4 2.4 2.5 U.S. Exports to Mexico 7.0 6.9 6.6 5.5 5.6 U.S. LNG Exports 12.5 11.9 12.1 11.1 6.1 U.S. Commercial 4.4 4.5 4.5 4.5 4.5 U.S. Residential 3.5 3.6 3.6 3.6 3.4 U.S. Power Plant 46.0 47.0 46.9 41.8 41.2 U.S. Industrial 21.4 21.4 21.4 21.3 21.5 U.S. Plant Fuel 5.0 5.0 5.0 5.1 5.0 U.S. Pipe Distribution 2.2 2.2 2.2 2.2 2.3 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 82.6 83.8 83.8 78.6 78.0 Total U.S. Demand 103.4 104.0 103.9 97.6 92.2 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2022 2021 2020 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Actual Actual Actual Apr-Sep 84 83 107 81 103 Jan-Jul 77 77 102 79 98 Oct-Sep 76 76 103 81 95 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Aug 25 Aug 18 Aug 11 Aug 4 Jul 28 Wind 7 7 7 7 7 Solar 3 4 4 4 4 Hydro 5 6 5 5 5 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 44 45 45 45 45 Coal 20 19 19 20 20 Nuclear 17 17 17 17 16 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.60 2.58 Transco Z6 New York 1.19 1.21 PG&E Citygate 4.16 4.50 Eastern Gas (old Dominion South) 1.09 1.32 Chicago Citygate 2.36 2.46 Algonquin Citygate 1.33 1.45 SoCal Citygate 3.45 3.90 Waha Hub 2.21 2.16 AECO 1.85 1.93 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day New England 24.25 23.25 PJM West 36.75 35.25 Ercot North 925.00 255.00 Mid C 38.50 40.25 Palo Verde 32.50 42.75 SP-15 43.50 43.50 (Reporting by Scott DiSavino; editing by Jonathan Oatis, Nick Zieminski and David Gregorio)

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