UPDATE 1-U.S. natgas hold near 4-week low as weather turns seasonally milder

Reuters · 03/01/2021 19:52
UPDATE 1-U.S. natgas hold near 4-week low as weather turns seasonally milder

Adds closing prices

- U.S. natural gas futures held near a four-week low on Monday on forecasts for seasonally milder weather and lower heating demand in March.

After falling for seven days in a row, front-month gas futures NGc1 edged up 0.6 cents, or 0.2%, to settle at $2.777 per million British thermal units. On Friday, the contract closed at its lowest since Jan. 29.

Refinitiv said output in the Lower 48 U.S. states dropped to an average of 86.5 billion cubic feet per day (bcfd) in February as extreme weather froze gas wells and pipes in Texas and the central United States, the lowest in a month since October 2018. That compares with 91.1 bcfd in January and an all-time monthly high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would drop from 111.3 bcfd this week to 102.9 bcfd next week as the weather turns seasonally milder. That, however, was higher than Refinitiv forecast on Friday.

The amount of gas flowing to U.S. LNG export plants fell to an average of 8.5 bcfd in February as extreme cold cut power and gas supplies, the lowest since October 2020. That compares with an average of 10.4 bcfd in January and a monthly record high of 10.7 bcfd in December.

Buyers around the world continue to purchase near record amounts of U.S. gas because prices in Europe TRNLTTFMc1 and Asia JKMc1 remain high enough over U.S. futures to make it profitable to ship American gas across the oceans. nL1N2II17S nL1N2JI0ZF nL1N2JI0ZF nL1N2JN0JA nL1N2IB10F nL1N2HP18M nL4N2IW21S

Traders, however, noted U.S. LNG exports cannot rise much more until new units enter service in 2022 since U.S. export capacity is only 10.5 bcfd. LNG plants can pull in a little more gas than they can export since they use some of the fuel to run the facility.


Week ended Feb 26(Forecast)

Week ended Feb 19 (Actual)

Year ago Feb 26

Five-year average Feb 26


U.S. natgas storage (bcf):

-151

-338

-119

-81














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

2.79

2.73

1.73

2.13

2.66

Title Transfer Facility (TTF) TRNLTTFMc1

5.62

5.59

2.72

3.24

5.19

Japan Korea Marker (JKM) JKMc1

6.20

5.81

3.14

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

279

257

256

313

328

U.S. GFS CDDs

10

14

15

11

7

U.S. GFS TDDs

289

271

271

324

335







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

85.8

90.9

90.4

93.5

81.0

U.S. Imports from Canada

9.0

7.9

8.2

7.7

8.3

U.S. LNG Imports

0.1

0.1

0.0

0.2

0.2

Total U.S. Supply

94.8

98.7

98.6

101.4

89.5


U.S. Demand (bcfd)

U.S. Exports to Canada

2.7

3.2

3.1

2.8

2.7

U.S. Exports to Mexico

5.2

5.3

5.3

5.6

4.4

U.S. LNG Exports

8.0

10.0

10.6

8.0

3.4

U.S. Commercial

16.5

14.0

11.8

12.8

11.9

U.S. Residential

27.3

22.1

18.3

19.8

18.8

U.S. Power Plant

25.0

25.5

23.5

28.5

24.9

U.S. Industrial

25.0

24.1

23.4

23.7

23.0

U.S. Plant Fuel

4.2

4.5

4.5

4.5

4.5

U.S. Pipe Distribution

2.7

2.5

2.2

2.5

2.5

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

100.9

92.8

83.9

91.9

85.7

Total U.S. Demand

116.8

111.3

102.9

108.3

96.2













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


Hub

Current Day

Prior Day




Henry Hub NG-W-HH-SNL

2.66

2.72




Transco Z6 New York NG-CG-NY-SNL

2.38

2.36




PG&E Citygate NG-CG-PGE-SNL

3.57

3.62




Dominion South NG-PCN-APP-SNL

2.18

2.07




Chicago Citygate NG-CG-CH-SNL

2.60

2.54




Algonquin Citygate NG-CG-BS-SNL

3.30

2.60




SoCal Citygate NG-SCL-CGT-SNL

2.90

2.86




Waha Hub NG-WAH-WTX-SNL

2.41

2.35










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


Hub

Current Day

Prior Day




New England EL-PK-NPMS-SNL

34.50

33.75




PJM West EL-PK-PJMW-SNL

21.50

24.00




Ercot North EL-PK-ERTN-SNL

21.00

23.75




Mid C EL-PK-MIDC-SNL

24.67

24.59




Palo Verde EL-PK-PLVD-SNL

20.75

23.00




SP-15 EL-PK-SP15-SNL

21.50

24.75





(Reporting by Scott DiSavino)

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

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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