S&P GSCI NATURAL GAS INDEX
By Scott DiSavino
Dec 21 (Reuters) - U.S. natural gas futures gained about 2% on Thursday on a slightly bigger-than-expected storage
withdrawal, forecasts for colder weather and higher heating demand in early January than previously expected and as record amount
of gas continued to flow to liquefied natural gas (LNG) export plants.
The U.S. Energy Information Administration (EIA) said utilities pulled 87 billion cubic feet (bcf) of gas from storage during
the week ended Dec. 15.
That was higher than the 80-bcf withdrawal analysts forecast in a Reuters poll and compares with a decrease of 82 bcf in the
same week last year and a five-year (2018-2022) average decline of 107 bcf.
Last week's decrease cut stockpiles to 3.577 trillion cubic feet (tcf), which was still 8.5% above the five-year average of
3.297 tcf for the time of year. Analysts said last week's withdrawal was smaller than usual for this time of year because
warmer-than-normal weather kept heating demand low.
Front-month gas futures for January delivery on the New York Mercantile Exchange (NYMEX) were up 4.5 cents, or 1.8%, at
$2.492 per million British thermal units (mmBtu) at 10:39 a.m. EST (1539 GMT).
Before EIA released the storage report, futures were up 1.1%.
Investor interest in trading gas has increased in recent weeks with open interest in NYMEX futures at a 27-month high of 1.447
million contracts on Dec. 19 and shares outstanding in the U.S. Natural Gas Fund (UNG) at a record 201.2 million contracts
on Dec. 18. UNG is an exchange traded fund (ETF) designed to track the daily price movements of gas.
Record production and ample supplies of gas in storage have weighed on gas prices for weeks, prompting some traders to
forecast that futures for this winter (November-March) have already peaked at $3.608 per mmBtu on Nov. 1.
Looking ahead, analysts project U.S. gas prices will rise in coming years as new LNG export plants enter service in the U.S.,
Canada and Mexico to meet rising global demand of the fuel.
But expected delays at Exxon Mobil/QatarEnergy's Golden Pass LNG export plant in Texas and Venture Global LNG's
Plaquemines in Louisiana have caused some analysts to reduce their forecasts for U.S. gas demand and prices in 2024.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the lower 48 U.S. states rose to 108.6 billion cubic feet per day (bcfd) so far
in December from a record 108.3 bcfd in November.
Meteorologists projected the weather would remain warmer than normal through Dec. 31 before turning near-normal to colder than
normal from Jan. 1-5.
LSEG forecast U.S. gas demand in the Lower 48 states, including exports, would drop from 126.2 bcfd this week to 120.8 bcfd
next week as many businesses and government offices shut for the Christmas holiday. Those forecasts were higher than LSEG's
outlook on Wednesday.
U.S. pipeline exports to Mexico fell to an average of 3.9 bcfd so far in December, down from 5.6 bcfd in November and a record
7.0 bcfd in August.
Analysts, however, expect exports to Mexico to rise in coming months once U.S. energy company New Fortress Energy's
plant in Altamira starts pulling in U.S. gas to turn into LNG for export in December.
Gas flows to the seven big U.S. LNG export plants rose to an average of 14.6 bcfd so far in December, up from a record 14.3
bcfd in November.
Week ended Week ended Year ago Five-year
Dec 15 Dec 8 Dec 15 average
Actual Actual Dec 15
U.S. weekly natgas storage change (bcf): -87 -55 -82 -107
U.S. total natgas in storage (bcf): 3,577 3,664 3,337 3,297
U.S. total storage versus 5-year average 8.5% 7.6%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2022 (2017-2021)
Henry Hub 2.48 2.45 5.77 6.54 2.89
Title Transfer Facility (TTF) 11.39 10.87 36.68 40.50 7.49
Japan Korea Marker (JKM) 11.81 11.78 32.34 34.11 8.95
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 360 348 462 408 428
U.S. GFS CDDs 1 1 3 5 4
U.S. GFS TDDs 361 349 365 413 432
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2018-2022)
Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 108.9 108.6 108.7 98.6 94.2
U.S. Imports from Canada8 8.6 8.5 8.6 10.1 9.1
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2
Total U.S. Supply 117.5 117.1 117.2 108.7 103.5
U.S. Demand (bcfd)
U.S. Exports to Canada 3.4 3.2 3.2 2.1 3.2
U.S. Exports to Mexico 3.8 3.9 4.3 5.0 5.0
U.S. LNG Exports 14.7 15.0 14.7 12.1 8.6
U.S. Commercial 13.8 13.8 12.8 20.4 14.6
U.S. Residential 22.3 22.1 20.3 35.6 24.7
U.S. Power Plant 34.1 35.2 33.2 34.9 28.6
U.S. Industrial 24.7 24.7 24.1 27.1 25.0
U.S. Plant Fuel 5.4 5.4 5.4 5.4 5.3
U.S. Pipe Distribution 2.7 2.8 2.6 2.7 2.9
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 103.1 104.0 98.6 126.2 101.2
Total U.S. Demand 125.0 126.2 120.8 145.4 118.0
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 80 80 83 107 81
Jan-Jul 79 80 77 102 79
Oct-Sep 81 81 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Dec 22 Dec 15 Dec 8 Dec 1 Nov 24
Wind 12 11 12 10 11
Solar 2 3 3 3 3
Hydro 6 6 5 6 6
Other 2 2 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 40 41 40 42 39
Coal 17 17 17 17 16
Nuclear 20 20 21 20 22
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 2.48 2.44
Transco Z6 New York 2.55 2.20
PG&E Citygate 3.66 3.97
Eastern Gas (old Dominion South) 1.91 1.85
Chicago Citygate 2.18 2.11
Algonquin Citygate 5.13 2.99
SoCal Citygate 3.45 3.60
Waha Hub 1.59 1.33
AECO 1.26 1.25
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 51.50 35.00
PJM West 37.00 37.75
Ercot North 21.00 17.25
Mid C 43.50 51.00
Palo Verde 40.00 43.00
SP-15 48.25 51.00
(Reporting by Scott DiSavino; Editing by Andrea Ricci and Jonathan Oatis)
US natgas gains 2% on colder forecasts, bigger-than expected storage decrease
December 21, 2023 at 10:31 am EST
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