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UPDATE 1-U.S. natgas futures edges up on threat of railroad strike

UPDATE 1-U.S. natgas futures edges up on threat of railroad strike

Reuters · 09/13/2022 15:00
UPDATE 1-U.S. futures edges up on threat of railroad strike

Adds latest prices, quote

- U.S. gas futures edged up to a fresh a one-week high on Tuesday on worries a possible railroad strike could threaten coal supplies to power plants, which could force generators to burn more gas to produce electricity.

The White House made contingency plans seeking to ensure deliveries of critical goods in the event of a shutdown of the U.S. rail system while again pressing railroads and unions to reach a deal to avoid a work stoppage affecting freight and passenger service.

"Market players ... fixated on the potential for U.S. coal supplies to be threatened amid a looming strike by the U.S. railroad union workers later this week," analysts at energy consulting firm Gelber & Associates said, the market ignored several bearish factors.

Those bearish factors included record output, forecasts for lower demand week than previously expected and the ongoing outage at the Freeport liquefied gas (LNG) export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles for winter.

Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day (bcfd) of gas before it shut on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November.

Front-month gas futures NGc1 rose 3.5 cents, or 0.4%, to settle at $8.284 per million British thermal units (mmBtu), their highest close since Sept. 2 for a second day in a row.

That also put the contract up for a fourth day in a row for the first time since May.

So far this year, gas futures are up about 123% as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine.

Gas was trading around $56 per mmBtu in Europe TRNLTTFMc1 and $53 in Asia JKMc1.

Russian gas exports via the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route - have averaged just 1.4 bcfd so far in September, down from 2.5 bcfd in August and 10.8 bcfd in September 2021. NG/EU


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U.S. gas futures lag far behind global prices because the United States is the world's top producer with all the fuel it for domestic use, while capacity constraints and the Freeport outage prevents the country from exporting more LNG.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states have risen to 93.1 bcfd so far in September from a record 98.0 bcfd in August.

With the coming of cooler autumn weather, Refinitiv projected average U.S. gas demand, including exports, would slip from 93.1 bcfd this week to 92.7 bcfd week. The forecast for week was lower than Refinitiv's outlook on Monday.

The average amount of gas flowing to U.S. LNG export plants has risen to 11.2 bcfd so far in September from 11.0 bcfd in August. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG.

The reduction in exports from Freeport is a problem for Europe, where most U.S. LNG has gone this year as countries there wean themselves off Russian energy.

Gas stockpiles in Europe - Belgium, France, Germany and the Netherlands EUGAS/STORAGE - were currently about 4% above their five-year (2017-2021) average for this time of year, according to Refinitiv. Storage was currently around 86% of capacity.

That is much healthier than U.S. gas inventories, which were still about 12% below their five-year . EIA/GAS NGAS/POLL



Week ended Sep 9 (Forecast)

Week ended
Sep 2 (Actual)

Year ago Sep 9

Five-year average Sep 9


U.S. weekly storage change (bcf):

+64

+54

+78

+82


U.S. total in storage (bcf):

2,758

2,694

2,994

3,125


U.S. total storage versus 5-year average

-11.7%

-11.5%
















Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2021

Five Year Average (2017-2021)

Henry Hub NGc1

8.38

8.25

5.11

3.73

2.89

Title Transfer Facility (TTF) TRNLTTFMc1

56.25

56.49

22.61

16.04

7.49

Japan Korea Marker (JKM) JKMc1

53.13

53.90

23.35

18.00

8.95













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

16

15

16

30

40

U.S. GFS CDDs

140

122

121

124

108

U.S. GFS TDDs

156

137

137

154

148







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

99.3

98.9

99.4

93.0

87.0

U.S. Imports from Canada

7.7

7.9

7.9

8.2

7.7

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.1

Total U.S. Supply

107.1

106.7

107.3

101.2

95.8







U.S. Demand (bcfd)






U.S. Exports to Canada

2.1

2.5

2.4

2.6

2.4

U.S. Exports to Mexico

5.4

5.6

5.6

5.8

5.3

U.S. LNG Exports

11.3

11.1

10.5

9.8

4.9

U.S. Commercial

4.5

4.7

4.8

4.7

4.9

U.S. Residential

3.6

3.8

4.0

3.8

3.9

U.S. Power Plant

41.7

37.1

37.1

34.4

33.2

U.S. Industrial

21.4

21.3

21.3

20.7

21.2

U.S. Plant Fuel

4.9

4.9

4.9

4.9

4.9

U.S. Pipe Distribution

2.1

2.0

2.0

2.0

2.1

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

78.4

73.9

74.2

70.6

70.3

Total U.S. Demand

97.2

93.1

92.7

88.8

82.9













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






Week ended Sep 16

Week ended Sep 9

Week ended Sep 2

Week ended Aug 26

Week ended Aug 19

Wind

6

6

7

5

6

Solar

3

3

3

3

3

Hydro

5

6

5

6

6

Other

2

2

2

2

2

Petroleum

0

0

0

0

0

Natural Gas

43

45

44

44

42

Coal

21

21

21

22

22

Nuclear

19

18

17

18

19













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

Hub

Current Day

Prior Day




Henry Hub NG-W-HH-SNL

8.20

8.31




Transco Z6 New York NG-CG-NY-SNL

7.54

7.02




PG&E Citygate NG-CG-PGE-SNL

9.60

8.82




Dominion South NG-PCN-APP-SNL

7.19

7.10




Chicago Citygate NG-CG-CH-SNL

7.59

7.34




Algonquin Citygate NG-CG-BS-SNL

7.60

7.60




SoCal Citygate NG-SCL-CGT-SNL

8.82

7.86




Waha Hub NG-WAH-WTX-SNL

7.31

7.35




AECO NG-ASH-ALB-SNL

3.55

2.78










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

Hub

Current Day

Prior Day




New England EL-PK-NPMS-SNL

88.50

73.00




PJM West EL-PK-PJMW-SNL

112.75

99.50




Ercot North EL-PK-ERTN-SNL

79.00

77.75




Mid C EL-PK-MIDC-SNL

101.50

107.00




Palo Verde EL-PK-PLVD-SNL

81.75

91.25




SP-15 EL-PK-SP15-SNL

83.00

93.75





(Reporting by Scott DiSavino; Editing by Paul Simao and Jonathan Oatis)

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

For Refinitiv type ENERGY in Eikon search bar and then go to the GAS drop down and the NORTH AMERICA drop down or see: cpurl://apps.cp./cms/?pageid=usa-gas

For Interactive Map, type 'Interactive Map' in the box at upper left of the Reuters terminal.

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For -day SNL U.S. gas prices, see: 0#SNL-NG

For -day SNL U.S. power prices, see: 0#SNL-PWR

For U.S. price and storage polls, see: NGAS/POLL

For U.S. power outages, see: NUKE/

For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S. gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

To determine CFTC managed money 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