Blog

Dec 14, 2023

US natgas prices ease as tropical storm provides relief from heat in Texas

Aug 22 (Reuters) - U.S. natural gas futures eased about 1% on Tuesday as the amount of gas flowing to liquefied natural gas (LNG) export plants remains low due to maintenance outages and as a tropical

Aug 22 (Reuters) - U.S. natural gas futures eased about 1% on Tuesday as the amount of gas flowing to liquefied natural gas (LNG) export plants remains low due to maintenance outages and as a tropical storm reduces power demand in Texas. That price decline came despite forecasts for gas demand to rise more than previously expected next week with the weather across much of the country expected to remain hotter than normal through at least early September. In the central U.S., power demand surged to an all-time high in the Southwest Power Pool (SPP) on Monday as homes and businesses cranked up their air conditioners to escape a brutal heat wave that is moving into the Midwest and is expected to cause power use to break records in the Midcontinent Independent System Operator (MISO) territory on Wednesday and Thursday. Extreme heat boosts the amount of gas burned to produce power for cooling, especially in Texas, which set two weekend demand records on Saturday and Sunday and 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. Cooling rains from Tropical Storm Harold, however, will offer some relief to the heat in Texas. The U.S. National Hurricane Center projected Harold would hit the South Texas coast on Tuesday. Power demand in Texas was on track to drop to 80,482 megawatts (MW) on Tuesday from 84,580 MW on Monday, according to the Electric Reliability Council of Texas, which operates the electric grid for much of the state. Front-month gas futures for September delivery on the New York Mercantile Exchange were down 1.2 cents, or 0.5%, to $2.620 per million British thermal units (mmBtu) at 9:28 a.m. EDT (1328 GMT). One factor that has weighed on gas futures in recent months - they are down about 43% so far this year - has been persistently lower spot prices. Next-day gas at the Henry Hub benchmark in Louisiana traded around $2.60 per mmBtu for Tuesday. Spot gas has only traded over futures twice since the end of April. SUPPLY AND DEMAND Data provider Refinitiv said average gas output in the U.S. Lower 48 states had eased to 101.7 billion cubic feet per day (bcfd) so far in August from 101.8 bcfd in July. That compares with a monthly record of 102.2 bcfd in May. Meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Sept. 6. Refinitiv forecast U.S. gas demand, including exports, would rise from 102.7 bcfd this week to 103.1 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Monday. Gas flows to the seven big U.S. LNG export plants has fallen from an average of 12.7 bcfd in July to 12.3 bcfd so far in August due mostly to reductions at Cheniere Energy's Sabine Pass facility in Louisiana. That compares with a monthly record of 14.0 bcfd in April. Week ended Week ended Year ago Five-year Aug 18 Aug 11 Aug 18 average Forecast Actual Aug 18 U.S. weekly natgas storage change (bcf): 33 35 54 49 U.S. total natgas in storage (bcf): 3,098 3,065 2,570 2,815 U.S. total storage versus 5-year average 10.1% 10.8% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.58 2.63 8.78 6.54 2.89 Title Transfer Facility (TTF) 13.77 12.77 69.68 40.50 7.49 Japan Korea Marker (JKM) 14.30 13.95 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 3 3 1 7 9 U.S. GFS CDDs 216 214 200 180 167 U.S. GFS TDDs 219 217 201 187 176 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 101.4 101.4 101.6 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 108.4 108.5 108.9 106.8 100.8 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 6.8 6.5 5.5 5.6 U.S. LNG Exports 12.5 12.0 12.5 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 45.7 45.7 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 82.5 82.6 78.6 78.0 Total U.S. Demand 103.4 102.7 103.1 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 83 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 9 7 7 7 7 Solar 3 4 4 4 4 Hydro 6 6 5 5 5 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 43 45 45 45 45 Coal 19 19 19 20 20 Nuclear 18 17 17 17 16 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.60 2.44 Transco Z6 New York 1.28 1.24 PG&E Citygate 4.96 4.74 Eastern Gas (old Dominion South) 1.26 1.21 Chicago Citygate 2.40 2.19 Algonquin Citygate 1.34 1.30 SoCal Citygate 3.95 3.46 Waha Hub 2.25 2.17 AECO 1.94 1.81 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day New England 24.75 22.25 PJM West 36.00 23.75 Ercot North 72.00 207.50 Mid C 41.00 73.50 Palo Verde 45.50 51.00 SP-15 44.00 48.25 (Reporting by Scott DiSavino Editing by Mark Potter)

Related Quotes