US natgas prices ease 1% on lower output reductions and less warm forecasts
Reuters · 09/15 13:28
US prices ease 1% on lower output reductions and less warm forecasts


Sept 15 (Reuters) - U.S. gas futures eased about 1% on Friday on lower production reductions than previously expected and forecasts for less warm weather week.

That price decline came despite an increase in the amount of gas flowing to Freeport LNG's liquefied gas (LNG) export plant in Texas.

Front-month gas futures NGc1 for October delivery on the New York Mercantile Exchange were down 3.2 cents, or 1.2%, to $2.676 per million British thermal units (mmBtu) at 9:13 a.m. EDT (1313 GMT).

For the week, the front-month was up about 3% after falling about 6% last week.

Financial firm LSEG said average gas output in the lower 48 U.S. states had eased to 102.2 billion cubic feet per day (bcfd) so far in September, down from a record 102.3 bcfd in August.

On a daily basis, however, output was on track to drop about 2.0 bcfd to a preliminary three-month low of 100.1 bcfd on Friday. That was a smaller output reduction than expected earlier in the week. Energy traders preliminary data is often revised later in the day.

Meteorologists forecast the weather in the lower 48 states would remain until around Sept. 23 before turning mostly warmer than usual from Sept. 24-30. Traders, however, that above temperatures in late September were very hot, with averages of around 72 degrees Fahrenheit (22.2 Celsius) versus a of 70 F for that time of year.

With seasonally cooler weather coming, LSEG forecasts U.S. gas demand, including exports, will slide from 100.6 bcfd this week to 96.6 bcfd for the two weeks. The forecasts for week were higher than LSEG's outlook on Thursday due mostly to an expected increase in LNG exports.

Gas flows to the seven big U.S. LNG export plants have averaged 12.7 bcfd so far in September, up from 12.3 bcfd in August. That compares with a monthly record of 14.0 bcfd in April.

On a daily basis, LNG feedgas was on track to reach a two-week high of 13.3 bcfd on Friday with increased flows to the Freeport plant.

The 2.1-bcfd Freeport facility was on track to pull in about 1.9 bcfd of gas on Friday, up from an average of 0.3 bcfd from Sept. 10-13, according to LSEG data.

Sources told Reuters this week that Freeport had canceled four cargoes since reducing feedgas. In the week before the reduction, the plant was pulling in about 1.8 bcfd of pipeline gas.

Looking ahead, traders Berkshire Hathaway Energy's 0.8-bcfd Cove Point LNG export plant in Maryland was on track to shut for about a week of planned maintenance around Sept. 21-29, according to company to customers. Cove Point shuts every year in the autumn for maintenance. In 2022, it shut from around Oct. 1-27, according to LSEG data.

The U.S. is on track to become the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar. Much higher global prices have fed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's war in Ukraine.

Gas was trading around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and $13 at the Japan Korea Marker (JKM) in Asia JKMc1. NG/EU


Week ended Sep 15 Forecast

Week ended Sep 8 Actual

Year ago Sep 15

Five-year average

Sep 15

U.S. weekly storage change (bcf):

69

57

99

84

U.S. total in storage (bcf):

3,274

3,205

2,859

3,086

U.S. total storage versus 5-year average

6.1%

6.8%

Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2022

Five Year Average (2017-2021)

Henry Hub NGc1

2.69

2.71

7.76

6.54

2.89

Title Transfer Facility (TTF) TRNLTTFMc1

10.97

10.99

57.90

40.50

7.49

Japan Korea Marker (JKM) JKMc1

13.37

13.39

46.99

34.11

8.95

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

17

16

19

28

45

U.S. GFS CDDs

119

119

130

127

102

U.S. GFS TDDs

136

135

149

156

147

LSEG 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

102.5

102.1

101.6

99.6

92.6

U.S. Imports from Canada

7.5

7.1

7.1

8.5

7.8

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.0

Total U.S. Supply

110.0

109.2

108.8

108.1

100.4

U.S. Demand (bcfd)

U.S. Exports to Canada

2.0

2.0

2.0

2.3

2.4

U.S. Exports to Mexico

7.0

7.0

7.1

5.5

5.6

U.S. LNG Exports

13.2

12.1

13.2

11.4

6.5

U.S. Commercial

4.5

4.7

4.8

4.7

4.9

U.S. Residential

3.6

3.8

3.9

3.7

3.9

U.S. Power Plant

42.5

42.2

37.1

36.2

34.9

U.S. Industrial

21.5

21.5

21.4

21.3

21.5

U.S. Plant Fuel

5.1

5.0

5.0

5.1

5.0

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

79.4

79.5

74.3

73.2

72.5

Total U.S. Demand

101.5

100.6

96.5

92.4

87.0







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

Current Day % of Normal Forecast

Prior Day % of Normal Forecast

2022

% of Normal Actual

2021 % of Normal Actual

2020 % of Normal Actual

Apr-Sep

83

83

107

81

103

Jan-Jul

77

77

102

79

98

Oct-Sep

76

76

103

81

95

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

Week ended Sep 15

Week ended Sep 8

Week ended Sep 1

Week ended Aug 25

Week ended Aug 18

Wind

6

9

6

7

7

Solar

4

4

4

4

4

Hydro

5

5

6

5

6

Other

2

2

2

2

2

Petroleum

0

0

0

0

0

Natural Gas

47

44

45

45

45

Coal

19

19

19

20

19

Nuclear

18

17

18

17

17

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

Hub

Current Day

Prior Day

Henry Hub NG-W-HH-SNL

2.81

2.76

Transco Z6 New York NG-CG-NY-SNL

1.50

1.65

PG&E Citygate NG-CG-PGE-SNL

4.24

4.35

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

1.52

1.54

Chicago Citygate NG-CG-CH-SNL

2.43

2.34

Algonquin Citygate NG-CG-BS-SNL

1.62

1.74

SoCal Citygate NG-SCL-CGT-SNL

4.80

4.84

Waha Hub NG-WAH-WTX-SNL

2.29

2.22

AECO NG-ASH-ALB-SNL

1.96

1.96


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


Hub

Current Day


New England EL-PK-NPMS-SNL

26.00

35.50

PJM West EL-PK-PJMW-SNL

33.00

32.25

Ercot North EL-PK-ERTN-SNL

33.00

30.25

Mid C EL-PK-MIDC-SNL

82.80

82.40

Palo Verde EL-PK-PLVD-SNL

45.50

44.50

SP-15 EL-PK-SP15-SNL

44.25

41.50


(Reporting by Scott DiSavino
Editing by Mark Potter)

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

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ICE Henry Hub options and futures combined 0#3CFTC023391

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NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C