S&P GSCI NATURAL GAS INDEX
By Scott DiSavino
Jan 25 (Reuters) - U.S. natural gas futures were little changed after giving up earlier gains of over 5% on Thursday
following a federal report showing last week's storage withdrawal was massive but in line with analysts estimates.
Earlier in the session, prices were up on forecasts for cooler weather and higher heating demand next week than previously
expected and the slow return of output after wells and other equipment froze in last week's Arctic freeze.
Even though it will be cooler than previously expected, meteorologists forecast the weather would remain warmer than normal
through early February.
The U.S. Energy Information Administration (EIA) said utilities pulled a much bigger than usual 326 billion cubic feet
(bcf) of gas out of storage during the week ended Jan. 19 due to extreme cold last week. That cold boosted gas demand to a daily
record high and cut both gas output and liquefied natural gas (LNG) feedgas to a one-year low.
That was the biggest weekly withdrawal since utilities pulled 338 bcf of gas out of storage during a brutal freeze in
February 2021 and the all-time record withdrawal of 359 bcf in January 2018.
Last week's withdrawal was close to the 321-bcf decline analysts forecast in a Reuters poll and compares with a decrease of 86
bcf in the same week last year and a five-year (2019-2023) average decline of 148 bcf for this time of year.
Front-month gas futures for February delivery on the New York Mercantile Exchange fell 0.7 cent, or 0.3%, to $2.634
per million British thermal units (mmBtu) at 10:40 a.m. EST (1540 GMT).
SUPPLY AND DEMAND
Financial company LSEG said average gas output in the Lower 48 states fell to 103.0 billion cubic feet per day (bcfd) so far
in January, down from a monthly record of 108.0 bcfd in December.
On a daily basis, U.S. gas output was on track to jump by 13.7 bcfd from Jan. 17-25 to a preliminary 104.2 bcfd on Thursday.
That, however, was not enough to make up for the 17.2 bcfd output drop from Jan. 8-16 to a 12-month low of 90.5 bcfd on Jan. 16,
due primarily to freeze-offs and other cold weather events.
Meteorologists projected temperatures in the Lower 48 states would remain warmer than normal from now through at least Feb. 9.
With less frigid temperatures coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would drop from 144.7
bcfd this week to 125.5 bcfd next week. The forecast for next week was higher than LSEG's outlook on Wednesday. That compares with
a daily record demand of 168.4 bcfd on Jan. 16 during the arctic freeze.
U.S. pipeline exports to Mexico rose to an average of 5.8 bcfd so far in January, up from 4.7 bcfd in December, but remained
well below the monthly record of 7.0 bcfd in August.
Analysts expect exports to Mexico to rise in the coming months once U.S.-based New Fortress Energy's LNG export plant
in Altamira in Mexico starts pulling in U.S. gas to liquefy for export.
Gas flows to the seven big U.S. LNG export plants fell to an average of 13.8 bcfd so far in January, down from a monthly
record of 14.7 bcfd in December.
But on a daily basis, LNG feedgas was on track to rise by about 4.8 bcfd from Jan. 17-25 to a preliminary 14.0 bcfd on
Thursday after dropping by 5.8 bcfd from Jan. 13-16 to a one-year low of 9.2 bcfd on Jan. 16 during last week's freeze.
Week ended Week ended Year ago Five-year
Jan 19 Jan 12 Jan 19 average
Actual Actual Jan 19
U.S. weekly natgas storage change (bcf): -326 -154 -86 -148
U.S. total natgas in storage (bcf): 2,856 3,182 2,746 2,714
U.S. total storage versus 5-year average 5.2% 11.2%
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 2.82 2.64 3.42 2.66 3.60
Title Transfer Facility (TTF) 8.84 9.18 19.79 13.04 14.39
Japan Korea Marker (JKM) 9.58 9.34 24.34 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 326 311 455 432 433
U.S. GFS CDDs 3 4 4 4 3
U.S. GFS TDDs 329 315 459 436 436
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 97.3 103.0 103.8 101.2 93.8
U.S. Imports from Canada8 9.4 10.0 8.8 9.1 9.3
U.S. LNG Imports 0.0 0.0 0.0 0.1 0.3
Total U.S. Supply 106.7 113.0 112.6 111.4 103.4
U.S. Demand (bcfd)
U.S. Exports to Canada 1.7 2.5 2.5 2.6 2.7
U.S. Exports to Mexico 5.8 5.8 5.7 5.5 5.3
U.S. LNG Exports 12.4 13.7 14.1 12.5 8.9
U.S. Commercial 22.3 18.2 13.8 16.7 16.6
U.S. Residential 39.2 30.9 21.8 28.2 28.6
U.S. Power Plant 37.1 38.8 34.6 32.3 29.5
U.S. Industrial 27.9 26.2 24.8 25.6 25.6
U.S. Plant Fuel 4.8 5.1 5.1 4.8 5.4
U.S. Pipe Distribution 3.6 3.3 2.7 3.6 2.9
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 135.0 122.6 103.1 111.3 108.7
Total U.S. Demand 154.9 144.7 125.5 131.9 125.6
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 80 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
Jan 26 Jan 19 Jan 12 Jan 5 Dec 29
Wind 8 10 14 8 11
Solar 2 2 2 2 2
Hydro 5 6 6 6 7
Other 2 2 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 42 39 38 42 40
Coal 23 23 19 19 16
Nuclear 18 17 19 20 22
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 2.45 2.15
Transco Z6 New York 1.85 2.15
PG&E Citygate 3.98 3.69
Eastern Gas (old Dominion South) 1.71 1.68
Chicago Citygate 2.25 2.08
Algonquin Citygate 2.51 2.75
SoCal Citygate 3.41 3.31
Waha Hub 2.16 1.68
AECO 1.48 1.35
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 32.25 42.50
PJM West 30.50 28.25
Ercot North 27.75 35.00
Mid C 61.00 98.33
Palo Verde 41.00 58.43
SP-15 46.50 55.25
(Reporting by Scott DiSavino; Editing by Chizu Nomiyama and Jonathan Oatis)
US natgas prices steady after paring gains on expected massive storage draw
January 25, 2024 at 10:40 am EST
Share
Share
