S&P GSCI NATURAL GAS INDEX
By Scott DiSavino
May 16 (Reuters) - U.S. natural gas futures climbed about 3% to a 15-week high on Thursday on a smaller-than-expected
storage build and another drop in output.
Also supporting the price increase was a rise in feedgas to liquefied natural gas (LNG) export plants with Cheniere Energy's
Sabine Pass export plant in Louisiana expected to return to full service.
The U.S. Energy Information Administration (EIA) said utilities added a smaller-than-expected 70 billion cubic feet (bcf) of
gas into storage during the week ended May 10. Analysts said that was lower than usual for this time of year due to reduced output
in recent weeks.
That was below the 77-bcf build analysts forecast in a Reuters poll and compares with an increase of 93 bcf in the same week
last year and a five-year (2019-2023) average rise of 90 bcf for this time of year.
Front-month gas futures for June delivery on the New York Mercantile Exchange rose 7.5 cents, or 3.1%, to $2.491 per
million British thermal units (mmBtu) at 10:36 a.m. EDT (1436 GMT), putting the contract on track for its highest close since Jan.
26.
That kept the front-month in technically overbought territory for a 10th straight day for the first time since April 2022.
Traders noted the futures price increase was kept in check by the tremendous oversupply of gas in storage. Analysts forecast
gas stockpiles were about 31% above normal levels for this time of year.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.1 billion cubic feet per day (bcfd)
so far in May, down from 98.2 bcfd in April. That compares with a monthly record high of 105.5 bcfd in December 2023.
On a daily basis, output dropped by around 2.4 bcfd over the past four days to a preliminary 17-week low of 95.7 bcfd on
Thursday.
That put U.S. gas production down about 10% so far in 2024 after several energy firms, including EQT and Chesapeake
Energy, delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in
February and March.
EQT is the biggest U.S. gas producer and Chesapeake is on track to become the biggest producer after its merger with
Southwestern Energy.
Meteorologists projected weather across the Lower 48 states would remain mostly warmer than normal through May 31.
LSEG forecast gas demand in the Lower 48, including exports, would hold near 92.8 bcfd over the next two weeks. The forecast
for this week was higher than LSEG's outlook on Wednesday.
Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 bcfd in April to 12.7 bcfd so far in May with
the return to full service of Freeport LNG's 2.1-bcfd export plant in Texas. That compares with a monthly record high of 14.7 bcfd
in December.
On a daily basis, LNG feedgas was on track to rise from 12.4 bcfd on Wednesday to 13.2 bcfd on Thursday as flows to the
4.5-bcfd Sabine Pass plant rise from an eight-month low of 3.8 bcfd on Wednesday to 4.6 bcfd on Thursday.
LNG export plants consume a little more gas than they can turn into LNG since they use some of that fuel to power the
equipment used to liquefy gas.
Week ended Week ended Year ago Five-year
May 10 May 3 May 10 average
Actual Actual May 10
U.S. weekly natgas storage change (bcf): +70 +79 +93 +90
U.S. total natgas in storage (bcf): 2,633 2,563 2,212 2,013
U.S. total storage versus 5-year average 30.8% 33.3%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2023 (2018-2022)
Henry Hub 2.43 2.42 2.30 2.66 3.60
Title Transfer Facility (TTF) 9.65 9.40 9.97 13.04 14.39
Japan Korea Marker (JKM) 10.80 10.45 10.45 14.39 14.31
LSEG 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 26 28 39 56 50
U.S. GFS CDDs 116 115 81 89 95
U.S. GFS TDDs 143 143 120 145 145
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2019-2023)
Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 97.2 97.2 97.2 102.5 94.4
U.S. Imports from Canada 7.5 7.1 6.9 6.9 7.5
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0
Total U.S. Supply 104.7 104.3 104.1 109.7 101.9
U.S. Demand (bcfd)
U.S. Exports to Canada 2.1 1.8 1.8 2.8 2.4
U.S. Exports to Mexico 6.6 6.6 6.6 6.1 5.6
U.S. LNG Exports 12.4 12.9 13.0 12.8 8.8
U.S. Commercial 5.6 5.2 4.8 5.1 5.8
U.S. Residential 6.0 5.1 4.4 5.0 6.9
U.S. Power Plant 32.7 32.6 33.7 34.2 28.4
U.S. Industrial 21.8 21.7 21.6 21.3 21.5
U.S. Plant Fuel 4.8 4.8 4.8 4.8 4.8
U.S. Pipe Distribution 1.9 1.9 1.9 1.9 1.9
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 72.9 71.4 71.3 72.4 69.4
Total U.S. Demand 94.1 92.7 92.8 94.1 86.2
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021
% of Normal % of Normal % of Normal % of Normal % of Normal
Forecast Forecast Actual Actual Actual
Apr-Sep 78 76 83 107 81
Jan-Jul 79 77 77 102 79
Oct-Sep 80 79 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
May 17 May 10 May 3 Apr 26 Apr 19
Wind 10 13 14 16 16
Solar 6 6 6 6 6
Hydro 8 7 7 7 7
Other 1 1 1 1 2
Petroleum 0 0 0 0 0
Natural Gas 40 41 40 37 37
Coal 14 14 13 13 13
Nuclear 20 19 19 19 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 2.12 2.14
Transco Z6 New York 1.62 1.49
PG&E Citygate 2.61 2.67
Eastern Gas (old Dominion South) 1.45 1.44
Chicago Citygate 1.90 1.80
Algonquin Citygate 1.65 1.63
SoCal Citygate 1.92 1.95
Waha Hub 0.31 0.17
AECO 0.74 0.76
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 31.50 30.50
PJM West 45.00 41.50
Ercot North 40.25 20.00
Mid C 12.00 53.00
Palo Verde 5.25 17.50
SP-15 3.00 15.00
(Reporting by Scott DiSavino; editing by Jonathan Oatis)
US natgas prices up 3% to 15-week high on small storage build, lower output
May 16, 2024 at 10:31 am EDT
Share
Share
