SPY412.27-3.80 -0.91%
DIA338.12-3.18 -0.93%
IXIC13,818.41-131.81 -0.94%

UPDATE 2-U.S. natgas gains 3% as winter storm persists

· 02/17/2021 13:01
UPDATE 2-U.S. natgas gains 3% as winter storm persists

Updates prices

- U.S. natural gas futures rose nearly 3% on Wednesday to a more than three-month high, extending its rally to a third session as a cold snap continued to wreak havoc on the energy industry and fuel soaring demand for heating.

Front-month gas futures NGc1 rose 9.0 cents, or 2.9%, to settle at $3.219 per million British thermal units, shaking off initial declines, which analysts attributed to forecasts suggesting a likely reprieve from the deep freeze next week.

Prices jumped over 10% on Tuesday to hit a high since Nov. 3 at $3.214.

"The current cold snap is expected to take a heavy toll on amount of gas available now and also down the road," said Zhen Zhu, economist at Oklahoma City-based C.H. Guernsey.

"The spike in the consumption coupled with the continued decline in production makes the gas market tighter than before."

Unusually freezing weather is likely to wreak havoc on U.S. oil and gas production for several days, if not weeks, according to industry experts, as companies deal with frozen equipment and a lack of power to run operations. nL1N2KM1Z3

The deep freeze left millions without power along the U.S. Gulf Coast, causing power prices to surge, especially in Texas - the country's biggest oil and natural gas producer.

Next-day power for Wednesday at the ERCOT North hub EL-PK-ERTN-SNL, which includes the cities of Dallas and Fort Worth, spiked to a record of $8,800 per MWh, a nearly sixfold jump from $1,490 on Tuesday. nL4N2KN2NU nL8N2KN026

Next-day prices at Waha hub in the Permian basin in West Texas NG-WAH-WTX-SNL also hit an all-time peak of $209.75 per mmBtu. Power at PJM Western Hub EL-PK-PJMW-SNL hit a high since January 2018.

Daily U.S. natural gas production has fallen by roughly 17% from the end of last week to 72.1 billion cubic feet per day on Wednesday, according to preliminary data from Refinitiv Eikon. nL1N2KL0HR

Data provider Refinitiv estimated 401 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, slightly down from Tuesday's forecast of 425 HDDs.

The normal is 374 HDDs for this time of year. HDDs measure the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). The measure is used to estimate demand to heat homes and businesses.

Prices will be susceptible to selling in the coming days as temperatures ease, said Daniel Myers, market analyst at Gelber & Associates in Houston.

Meanwhile, Refinitiv projected average demand, including exports, would ease to 122.2 to billion cubic feet per day (bcfd) next week from this week's 144.4 bcfd, while staying above the five-year average of 107.2 bcfd.



Week ended Feb 12 (Forecast)

Week ended Feb 5 (Actual)

Year ago Feb 12

Five-year average Feb 12


U.S. natgas storage (bcf):

-230

-171

-141

-142














Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2020

Five Year Average (2016-2020)

Henry Hub NGc1

3.10

3.13

1.84

2.13

2.66

Title Transfer Facility (TTF) TRNLTTFMc1

5.95

5.85

2.91

3.24

5.19

Japan Korea Marker (JKM) JKMc1

6.35

6.40

3.29

4.22

6.49













Refinitiv 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

401

425

405

403

374

U.S. GFS CDDs

6

6

7

6

5

U.S. GFS TDDs

407

431

412

409

379







Refinitiv U.S. Weekly GFS Supply and Demand Forecasts



Prior Week

Current Week

Next Week

This Week Last Year

Five-Year Average For Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production

89.9

79.7

81.0

93.5

81.0

U.S. Imports from Canada

8.6

9.6

8.1

8.9

8.6

U.S. LNG Imports

0.1

0.1

0.0

0.4

0.3

Total U.S. Supply

98.5

89.4

89.2

102.8

89.9


U.S. Demand (bcfd)

U.S. Exports to Canada

2.1

2.0

2.0

2.7

2.6

U.S. Exports to Mexico

6.0

5.0

5.7

5.6

4.5

U.S. LNG Exports

10.4

6.4

8.2

8.2

3.2

U.S. Commercial

19.9

22.6

17.6

16.7

14.9

U.S. Residential

33.4

39.8

29.4

27.3

24.7

U.S. Power Plant

28.7

33.6

27.1

30.7

25.4

U.S. Industrial

26.4

27.5

25.3

25.2

24.4

U.S. Plant Fuel

4.4

3.9

4.0

4.5

4.5

U.S. Pipe Distribution

3.1

3.5

2.8

3.5

2.9

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

116.1

131.1

106.4

124.5

96.9

Total U.S. Demand

134.7

144.4

122.2

141.0

107.2













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


Hub

Current Day

Prior Day




Henry Hub NG-W-HH-SNL

11.32

6.12




Transco Z6 New York NG-CG-NY-SNL

14.96

5.73




PG&E Citygate NG-CG-PGE-SNL

8.98

6.07




Dominion South NG-PCN-APP-SNL

7.79

3.91




Chicago Citygate NG-CG-CH-SNL

23.4

145.86




Algonquin Citygate NG-CG-BS-SNL

12.30

11.25




SoCal Citygate NG-SCL-CGT-SNL

102.78

136.34




Waha Hub NG-WAH-WTX-SNL

209.75

157.71










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


Hub

Current Day

Prior Day




New England EL-PK-NPMS-SNL

105.75

83.75




PJM West EL-PK-PJMW-SNL

135.5

45.75




Ercot North EL-PK-ERTN-SNL

8800.00

1489.75




Mid C EL-PK-MIDC-SNL

187.41

150.25




Palo Verde EL-PK-PLVD-SNL

421.75

287.50




SP-15 EL-PK-SP15-SNL

438.75

291.00





(Reporting by Bharat Govind Gautam and Eileen Soreng in Bengaluru; editing by Jonathan Oatis and Richard Chang)

((eileen.soreng@thomsonreuters.com; Within U.S. +1 646 223 8780, Outside U.S. +91 80 6749 6131; Reuters Messaging: eileen.soreng.thomsonreuters.com@reuters.net))

For Refinitiv, formerly Thomson Reuters Supply Chain & Commodities Research (SC&CR), type ENERGY in Eikon search bar and then go to the GAS dropdown and the NORTH AMERICA dropdown or see: cpurl://apps.cp./cms/?pageid=usa-gas

For Thomson Reuters Interactive Map, type 'Interactive Map' in the box at upper left of the Reuters Eikon terminal.
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SNL U.S. gas prices, see: 0#SNL-NG
For next-day SNL U.S. power prices, see: 0#SNL-PWR
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/
For U.S. Northwest hydro power report, see: NWRFC
For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
For the U.S. natural gas speed guide, see: USGAS
For the U.S. power speed guide, see: USPOWER

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

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