June 12, 2020 / 7:09 PM / 24 days ago

UPDATE 1-U.S. natgas fall to 2-wk low on mild weather, falling LNG exports

 (Adds closing prices)
    June 12 (Reuters) - U.S. natural gas futures fell on Friday to a two-week low on forecasts for
milder weather and weaker cooling demand than previously expected, and declining liquefied natural gas
(LNG) exports.
    Front-month gas futures fell 8.2 cents, or 4.5%, to settle at $1.731 per million British
thermal units, their lowest since May 27.
    Refinitiv said production in the Lower 48 U.S. states fell to an average of 88.6 billion cubic feet
per day in June from a one-year low of 89.2 bcfd in May and an all-time monthly high of 95.4 bcfd in
November.
    With milder weather expected in mid-June, Refinitiv forecast U.S. demand, including exports, would
slide from 82.5 bcfd this week to 79.1 bcfd next week before rising to 85.4 bcfd in two weeks as the
weather warms again.
    The amount of pipeline gas flowing to U.S. LNG export plants fell to an average of 4.1 bcfd (42%
utilization) in June, down from an eight-month low of 6.4 bcfd in May and a monthly record high of 8.7
bcfd in February. Utilization was near 90% in 2019.
    U.S. LNG exports dropped in recent months as buyers canceled dozens of cargoes for the summer with
U.S. gas prices trading mostly higher than in Europe since late April
due to demand destruction from the coronavirus and record-high European stockpiles.
    Those higher U.S. prices prompted some energy firms to send LNG to the United States for storage.

    U.S. pipeline exports, however, are rising as North American consumers crank up their air
conditioners.
    Refinitiv said pipeline exports to Canada averaged 2.3 bcfd in June, up from a seven-month low of
2.2 bcfd in May but still well below the all-time monthly high of 3.5 bcfd in December. Pipeline exports
to Mexico averaged 5.4 bcfd this month, up from 4.8 bcfd in May but shy of the record 5.6 bcfd in March.
               
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jun 12         Jun 5        Jun 12     average    
                                        (Forecast)      (Actual)                  Jun 12    
 U.S. natgas storage (bcf):                +87            +93          +111        +87      
                                                                                            
                                                                                            
 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days                         
 Two-Week Total Forecast               Current Day     Prior Day    Prior Year   10-Year    30-Year Norm
                                                                                   Norm     
 U.S. GFS HDDs                              8              8            14          14           12
 U.S. GFS CDDs                             177            183          137         158          155
 U.S. GFS TDDs                             185            191          151         172          167
                                                                                            
 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts                                      
                                        Prior Week    Current Week  Next Week   This Week    Five-Year
                                                                                Last Year   Average For
                                                                                               Month
 U.S. Supply (bcfd)                                                                               
                                                                                            
 U.S. Lower 48 Dry Production              88.7           88.5         88.6        90.0         77.5
 U.S. Imports from Canada                  6.2            6.0          6.5         7.9          7.9
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         95.0           94.6         95.1        97.9         85.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.2            2.4          2.4         2.5          1.9
 U.S. Exports to Mexico                    5.1            5.4          5.1         5.0          4.1
 U.S. LNG Exports                          5.2            4.0          4.0         5.3          1.9
 U.S. Commercial                           4.6            4.5          4.5         4.6          4.7
 U.S. Residential                          3.9            3.8          3.8         3.9          4.1
 U.S. Power Plant                          32.3           34.6         31.6        31.3         31.0
 U.S. Industrial                           21.3           21.3         21.4        21.3         20.4
 U.S. Plant Fuel                           4.4            4.4          4.4         4.4          4.5
 U.S. Pipe Distribution                    1.8            1.9          1.8         1.8          1.9
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    68.6           70.7         67.6        67.4         66.7
 Total U.S. Demand                         81.1           82.5         79.1        80.2         74.6
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.77           1.72                              
 Transco Z6 New York NG-CG-NY-SNL        1.49           1.59                              
 PG&E Citygate NG-CG-PGE-SNL             2.51           2.55                              
 Dominion South NG-PCN-APP-SNL           1.40           1.47                              
 Chicago Citygate NG-CG-CH-SNL           1.57           1.60                              
 Algonquin Citygate NG-CG-BS-SNL         1.55           1.67                              
 SoCal Citygate NG-SCL-CGT-SNL           2.05           2.24                              
 Waha Hub NG-WAH-WTX-SNL                 1.46           1.42                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             22.75          20.75                              
 PJM West EL-PK-PJMW-SNL                20.03          24.75                              
 Ercot North EL-PK-ERTN-SNL             21.50          19.50                              
 Mid C EL-PK-MIDC-SNL                    6.38          15.50                              
 Palo Verde EL-PK-PLVD-SNL              19.75          24.75                              
 SP-15 EL-PK-SP15-SNL                   20.50          27.00                              
 
 (Reporting by Scott DiSavino
Editing by Marguerita Choy)
  
 
 
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