UPDATE 2-US natgas prices jump 5% to 14-week high as Helene batters US Southeast

Reuters · 09/27 14:10
UPDATE 2-US natgas prices jump 5% to 14-week high as Helene batters US Southeast

Adds latest prices

By Scott DiSavino

- U.S. natural gas futures jumped about 5% to a 14-week high on Friday as Hurricane Helene battered the U.S. Southeast after causing Gulf of Mexico producers to cut output and knocking out power to millions of customers in Florida, Georgia and the Carolinas.

Energy traders noted that prices were also supported as the amount of gas flowing to Venture Global's Plaquemines LNG export plant in Louisiana was on track to match a high of around 35 million cubic feet per day that it hit in mid-August. That is still a very small amount of gas. The first phase of the Plaquemines project will have the capacity to turn about 1.8 billion cubic feet per day of gas into LNG.

Analysts have said the plant could start producing LNG in test mode over the next month or so. Officials at Venture Global were not immediately available for comment.

Another factor analysts have noted that has supported prices in recent weeks was that storage injections in July, August and so far in September were at record lows, according to federal energy data going back to 1997. That is because many producers cut output earlier this year after average spot monthly prices at the U.S. Henry Hub NG-W-HH-SNL benchmark in Louisiana fell to a 32-year low.

On its first day as the front-month, gas futures NGc1 for November delivery on the New York Mercantile Exchange rose 14.9 cents, or 5.4%, from where they traded on Thursday to settle at $2.902 per million British thermal units (mmBtu) on Friday, their highest close since June 18.

That, however, was up about 12% from where the less expensive October contract closed when it was still the front-month on Thursday.

That expiration-caused price increase pushed the front-month back into technically overbought territory for the third time this week after hitting that level on Monday and Wednesday.

For the week, the contract was up about 19%, putting it on track for a fifth week of gains for the first time since April 2022. During that time, the front-month has gained about 43%.

The U.S. National Hurricane Center forecast the remnants of Helene, now a tropical depression, would remain over Tennessee and Kentucky over the weekend.

There were currently about 4.6 million homes and businesses without power, mostly in Florida, Georgia and the Carolinas, from Helene. That is down from around 5.2 million affected by the storm as utilities in Florida, Georgia and South Carolina have been able to restore service to some customers since the storm slammed into the Florida Panhandle late Thursday.

Although storms are more likely to reduce gas prices and demand through power outages and shutting of liquefied natural gas export plants, analysts said this storm was on track to miss the LNG plants.

That means demand for gas from those LNG export plants should remain high at the same time that some Gulf Coast producers have cut output. The U.S. Bureau of Safety and Environmental Enforcement said that about 18%, or 0.3 bcfd, of gas production in the U.S. Gulf of Mexico was still shut-in for Helene.

More than 75% of U.S. gas production still comes from big inland shale basins like Appalachia in Pennsylvania, West Virginia and Ohio and the Permian in West Texas and eastern New Mexico, so most of the country's gas output should remain safe from the storm.

Week ended Sep 27

Actual

Week ended Sep 20 Actual

Year ago Sep 27

Five-year average

Sep 27


U.S. weekly natgas storage change (bcf):

+60

+47

+87

+98


U.S. total natgas in storage (bcf):

3,552

3,492

3,420

3,357


U.S. total storage versus 5-year average

5.8%

7.1%


Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2023

Five-Year Average (2018-2022)

Henry Hub NGc1

2.73

2.75

2.70

2.66

3.60

Title Transfer Facility (TTF) TRNLTTFMc1

12.24

12.24

11.44

13.04

14.39

Japan Korea Marker (JKM) JKMc1

13.19

13.10

13.92

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 Norm

30-Year Norm

U.S. GFS HDDs

51

39

30

54

83

U.S. GFS CDDs

97

100

105

93

68

U.S. GFS TDDs

148

139

135

147

151

LSEG U.S. Weekly GFS Supply and Demand Forecasts

Prior Week

Current Week

Next Week

This Week Last Year

Five-Year (2019-2023) Average For Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production

101.9

101.8

101.2

103.5

96.5

U.S. Imports from Canada

8.0

7.9

7.6

N/A

7.1

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.0

Total U.S. Supply

109.9

109.6

108.8

N/A

103.6

U.S. Demand (bcfd)

U.S. Exports to Canada

2.2

1.9

1.9

N/A

2.3

U.S. Exports to Mexico

7.2

7.0

7.1

N/A

6.0

U.S. LNG Exports

12.6

12.3

12.8

12.8

8.2

U.S. Commercial

4.7

4.8

5.0

4.9

4.9

U.S. Residential

3.9

4.0

4.2

4.0

3.9

U.S. Power Plant

39.9

40.5

38.2

37.0

36.0

U.S. Industrial

21.8

21.9

22.0

21.6

21.7

U.S. Plant Fuel

5.0

5.0

5.0

5.0

5.1

U.S. Pipe Distribution

2.1

2.1

2.0

2.1

2.2

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

77.6

78.4

76.6

74.7

80.0

Total U.S. Demand

99.6

99.6

98.4

N/A

90.4

N/A is Not Available












U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam

Current Day % of Normal Forecast

Prior Day % of Normal Forecast

2023

% of Normal Actual

2022 % of Normal Actual

2021 % of Normal Actual

Apr-Sep

74

74

83

107

81

Jan-Jul

76

76

77

102

79

Oct-Sep

78

77

76

103

81

U.S. weekly power generation percent by fuel - EIA

Week ended Sep 27

Week ended Sep 20

2023

2022

2021

Wind

7

9

10

11

10

Solar

5

5

4

3

3

Hydro

5

5

6

6

7

Other

1

1

2

2

2

Petroleum

0

0

0

0

0

Natural Gas

46

46

41

38

37

Coal

17

16

17

21

23

Nuclear

19

18

19

19

20

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

Hub

Current Day

Prior Day

Henry Hub NG-W-HH-SNL

2.64

2.62


Transco Z6 New York NG-CG-NY-SNL

1.23

1.55


PG&E Citygate NG-CG-PGE-SNL

3.00

2.98


Eastern Gas (old Dominion South) NG-PCN-APP-SNL

1.21

1.56


Chicago Citygate NG-CG-CH-SNL

2.52

2.47


Algonquin Citygate NG-CG-BS-SNL

1.65

1.97


SoCal Citygate NG-SCL-CGT-SNL

2.47

2.43


Waha Hub NG-WAH-WTX-SNL

1.39

0.81




AECO NG-ASH-ALB-SNL

0.07

0.15



SNL U.S. Power Next-Day Prices ($ per megawatt-hour)


Hub

Current Day

Prior Day

New England EL-PK-NPMS-SNL

36.50

42.50



PJM West EL-PK-PJMW-SNL

37.00

45.75



Ercot North EL-PK-ERTN-SNL

25.25

29.00


Mid C EL-PK-MIDC-SNL

50.50

49.00




Palo Verde EL-PK-PLVD-SNL

36.00

33.25


SP-15 EL-PK-SP15-SNL

34.75

31.75



(Reporting by Scott DiSavino; Editing by Jonathan Oatis and Daniel Wallis)

((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))

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NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C