March 23, 2020 / 7:21 PM / 6 days ago

UPDATE 1-U.S. natgas futures hold at 24-year low with coming of milder weather

 (Adds latest prices)
    March 23 (Reuters) - U.S. natural gas futures held near a 24-year low on Monday as forecasts for
milder weather and less demand next week offset a projected increase in flows to liquefied natural gas
(LNG) export terminals and a cooler outlook this week.
    "The market is suspended in a state of uncertainty today which explains the sideways price action,"
Daniel Myers, market analyst at Gelber & Associates in Houston, said in a report, noting "Demand impacts
from the current slowdown in economic activity (due to the coronavirus) remain unclear and are somewhat
obscured by the start of mild, shoulder-season weather."
    Traders said warmer weather next week should allow utilities to inject gas into storage for the first
time this year.
    Front-month gas futures for April delivery on the New York Mercantile Exchange fell 0.2 cents,
or 0.1%, to settle at $1.602 per million British thermal units, their lowest since September 1995 for a
second day in a row. On Friday, the contract tied the 24-year low hit earlier in the week. The all-time
low for gas futures is $1.04 in January 1992.
    Looking ahead, futures for the balance of the year and calendar 2021
were trading higher on expectations low energy prices should start to boost energy demand later this
year.
    Even before the coronavirus started to spread, gas prices were already trading near their lowest in
years as record production and months of mild weather enabled utilities to leave more gas in storage,
making fuel shortages and price spikes unlikely this winter.
    Now with the coming of milder spring-like weather, data provider Refinitiv projected gas demand in
the U.S. Lower 48 states, including exports, would slide from an average of 105.4 billion cubic feet per
day (bcfd) this week to 100.1 bcfd next week. That compares with Refinitiv's forecast on Friday of 104.7
bcfd this week and 103.4 bcfd next week.
    The amount of gas expected to flow to U.S. LNG export plants was on track to hold at 9.4 bcfd for a
third day in a row on Monday. That compares with an average of 8.1 bcfd last week when fog delayed tanker
traffic into Cheniere Energy Inc's Sabine Pass LNG export terminals and an all-time daily high of
9.5 bcfd on Jan. 31.
                     
                                        Week ended     Week ended    Year ago    Five-year   
                                         March 20      March 13      March 20     average    
                                        (Forecast)      (Actual)                 March 20    
 U.S. natgas storage (bcf):                -22             -9          -39          -40      
                                                                                             
                                                                                             
 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                             220            240          231          222          233
 U.S. GFS CDDs                              24             29           13          21            16
 U.S. GFS TDDs                             244            269          244          243          249
                                                                                             
 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              94.2           93.9         93.9        90.2          76.9
 U.S. Imports from Canada                  6.8            7.0          6.9          8.4          8.5
 U.S. LNG Imports                          0.0            0.0          0.0          0.0          0.2
 Total U.S. Supply                        101.0          100.9        100.8        98.6          85.6
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.8            2.5          2.6          3.0          2.6
 U.S. Exports to Mexico                    5.6            5.6          5.6          4.8          3.8
 U.S. LNG Exports                          7.8            9.4          9.5          4.0          1.8
 U.S. Commercial                           11.2           11.4         10.1        11.1          12.3
 U.S. Residential                          16.8           17.3         14.8        16.8          19.4
 U.S. Power Plant                          29.9           28.8         27.8        24.7          23.7
 U.S. Industrial                           23.2           23.3         22.9        22.9          22.6
 U.S. Plant Fuel                           4.7            4.6          4.6          4.6          4.7
 U.S. Pipe Distribution                    2.3            2.3          2.2          2.3          2.5
 U.S. Vehicle Fuel                         0.1            0.1          0.1          0.1          0.1
 Total U.S. Consumption                    88.3           87.9         82.4        82.5          85.3
 Total U.S. Demand                        104.4          105.4        100.1        94.3          93.5
                                                                                             
                                                                                             
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                          
 Hub                                   Current Day     Prior Day                             
 Henry Hub NG-W-HH-SNL                   1.76           1.68                               
 Transco Z6 New York NG-CG-NY-SNL        1.52           1.25                               
 PG&E Citygate NG-CG-PGE-SNL             2.43           2.61                               
 Dominion South NG-PCN-APP-SNL           1.33           1.22                               
 Chicago Citygate NG-CG-CH-SNL           1.55           1.54                               
 Algonquin Citygate NG-CG-BS-SNL         1.61           1.38                               
 SoCal Citygate NG-SCL-CGT-SNL           2.03           2.13                               
 Waha Hub NG-WAH-WTX-SNL                 0.51           1.05                               
                                                                                             
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                        
 Hub                                   Current Day     Prior Day                             
 New England EL-PK-NPMS-SNL             15.50          16.50                               
 PJM West EL-PK-PJMW-SNL                22.75          21.50                               
 Ercot North EL-PK-ERTN-SNL             31.75          22.50                               
 Mid C EL-PK-MIDC-SNL                   19.50          25.50                               
 Palo Verde EL-PK-PLVD-SNL              21.00          20.25                               
 SP-15 EL-PK-SP15-SNL                   27.00          27.25                               
 
 (Reporting by Scott DiSavino; Editing by David Gregorio and Grant McCool)
  
 
 
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