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UPDATE 1-U.S. natgas up 2% on colder forecasts; Freeport LNG delay

Reuters · 11/15/2022 15:03
UPDATE 1-U.S. up 2% on colder forecasts; Freeport LNG delay

Adds latest prices, quote


- U.S. gas futures gained about 2% on Tuesday on forecasts for colder weather and more heating demand week than previous estimates, but expectations that Freeport LNG will delay the restart of its liquefied gas (LNG) export plant in Texas clouded the outlook.

Freeport LNG, as of Monday afternoon, had submitted a request to resume service to the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA). Many analysts believe that means the plant will return until December at the earliest.


Global gas markets have been extremely focused on Freeport this month, with U.S. futures gaining or losing more than 5% in seven of the past 10 days. Some people have created fake releases on Freeport letterhead and posted unfounded tweets about pipe cracks to sway the market up or down.


Some traders have called on the U.S. Commodities Futures Trading Commission (CFTC) to investigate the flood of misinformation.


Until late last week, Freeport had said repeatedly that the plant, which shut after an explosion on June 8, was on track to return to service in November. The company, however, did mention a November restart, or any restart date, in comments made on Friday or Monday.


"Speculating on Freeport's restart timeline is a loser's game, but resuming output by year-end would provide the boost in demand that bullish market participants have been anticipating, resulting in an upside catalyst for prices," Ade Allen, an analyst at energy research firm Rystad Energy, said in a .



Once the 2.1-billion cubic feet per day (bcfd) Freeport facility returns to service, U.S. gas prices should rise due to increased demand from LNG export plants. On the flip side, the delay in Freeport's return means less gas available for Europe TRNLTTFMc1 to import, a factor which helped prices there spike around 7% on Tuesday. Europe U.S. gas because it is getting as much Russian fuel as usual after imposing sanctions on Moscow for Russia's invasion of Ukraine.

A couple of vessels were waiting to pick up LNG from Freeport, according to Refinitiv data. Prism Diversity and Prism Courage were offshore from the plant, while LNG Rosenrot and Prism Agility were expected to arrive in late November.

But one vessel, Prism Brilliance, which had been waiting outside the Freeport plant, seems to have given up on Freeport and was sitting outside of Corpus Christi where Cheniere Energy Inc LNG.A has an LNG export plant.

Front-month gas futures NGc1 rose 10.1 cents, or 1.7%, to settle at $6.034 per million British thermal units (mmBtu).


Gas futures are up about 63% so far this year as much higher global gas prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine.

Gas was trading at $37 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe TRNLTTFMc1 and $27 at the Japan Korea Marker (JKM) in Asia JKMc1. NG/EU


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U.S. gas futures lag 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 have prevented the country from exporting more LNG.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 99.1 bcfd so far in November, down from a record 99.4 bcfd in October.

With much colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 121.7 bcfd this week to 127.0 bcfd week. The forecast for week was higher than Refinitiv's outlook on Monday.


Week ended Nov 11 (Forecast)

Week ended
Nov 4 (Actual)

Year ago Nov 11

Five-year average Nov 11


U.S. weekly storage change (bcf):

+64

+79

+23

-5


U.S. total in storage (bcf):

3,644

3,580

3,640

3,656


U.S. total storage versus 5-year average

-0.3%

-2.1%
















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

6.05

5.93

5.12

3.73

2.89

Title Transfer Facility (TTF) TRNLTTFMc1

38.28

34.74

27.71

16.04

7.49

Japan Korea Marker (JKM) JKMc1

27.23

27.23

32.98

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

364

362

304

296

305

U.S. GFS CDDs

5

6

8

11

9

U.S. GFS TDDs

369

368

312

307

314







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

98.8

100.1

100.4

95.3

89.6

U.S. Imports from Canada

6.2

8.2

7.8

8.8

8.2

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.1

Total U.S. Supply

105.0

108.3

108.2

104.1

97.9







U.S. Demand (bcfd)






U.S. Exports to Canada

2.3

2.1

2.1

3.3

2.9

U.S. Exports to Mexico

5.8

5.6

5.6

5.5

5.1

U.S. LNG Exports

11.5

12.2

12.6

11.3

6.4

U.S. Commercial

8.5

14.1

16.1

12.0

11.5

U.S. Residential

11.6

22.9

26.5

18.2

17.2

U.S. Power Plant

29.1

31.7

30.5

27.4

26.0

U.S. Industrial

22.6

25.2

25.6

23.4

24.0

U.S. Plant Fuel

4.9

4.9

5.0

4.9

4.9

U.S. Pipe Distribution

2.1

2.7

2.8

2.7

2.1

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

78.9

101.8

106.6

88.7

85.8

Total U.S. Demand

98.4

121.7

127.0

108.8

100.2













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






Week ended Nov 18

Week ended Nov 11

Week ended Nov 4

Week ended Oct 28

Week ended Oct 21

Wind

11

15

12

15

11

Solar

3

3

3

3

3

Hydro

6

6

5

5

5

Other

2

3

2

2

3

Petroleum

0

0

0

0

0

Natural Gas

39

38

39

37

39

Coal

17

16

18

18

19

Nuclear

22

20

20

19

19













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

Hub

Current Day

Prior Day




Henry Hub NG-W-HH-SNL

6.24

4.80




Transco Z6 New York NG-CG-NY-SNL

6.39

3.70




PG&E Citygate NG-CG-PGE-SNL

8.76

8.46




Dominion South NG-PCN-APP-SNL

5.43

3.31




Chicago Citygate NG-CG-CH-SNL

6.21

5.09




Algonquin Citygate NG-CG-BS-SNL

6.64

4.25




SoCal Citygate NG-SCL-CGT-SNL

8.87

8.30




Waha Hub NG-WAH-WTX-SNL

5.00

3.72




AECO NG-ASH-ALB-SNL

4.60

4.09










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

Hub

Current Day

Prior Day




New England EL-PK-NPMS-SNL

81.25

51.50




PJM West EL-PK-PJMW-SNL

103.00

52.50




Ercot North EL-PK-ERTN-SNL

71.50

45.50




Mid C EL-PK-MIDC-SNL

107.11

125.00




Palo Verde EL-PK-PLVD-SNL

85.50

90.00




SP-15 EL-PK-SP15-SNL

84.50

91.00





(Reporting by Scott DiSavino; Editing by Paul Simao and Richard Chang)

((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