July 6, 2020 / 7:07 PM / a month ago

UPDATE 1-U.S. natgas jumps to 5-week high on hot weather, rising cooling demand

 (Adds latest prices)
    July 6 (Reuters) - U.S. natural gas futures jumped to a five-week high on Monday on forecasts
calling for warmer weather and higher air conditioning demand over the next two weeks than previously
expected.
    That price move comes despite rising output, coronavirus demand destruction, swelling stockpiles and
a collapse in liquefied natural gas (LNG) exports to their lowest since 2018.
    Front-month gas futures rose 9.6 cents, or 5.5%, to settle at $1.830 per million British
thermal units. That is their highest close since May 29 and is up almost 30% from a near 25-year low of
$1.432 hit about a week ago.
    Looking ahead, futures for the balance of 2020 and calendar 2021 were trading
about 22% and 43% over the front-month, respectively, on hopes the economy and energy demand will
rebound as state governments lift coronavirus-linked lockdowns.
    Refinitiv said production in the Lower 48 U.S. states averaged 88.7 billion cubic feet per day
(bcfd) so far in July, up from a 20-month low of 87.0 bcfd in June compared with an all-time monthly
high of 95.4 bcfd in November.
    As the weather heats up, Refinitiv forecasts U.S. demand, including exports, would rise from 89.0
bcfd this week to 92.6 bcfd next week. That is higher than its forecasts on Thursday before the long
U.S. July Fourth holiday weekend.
    Pipeline gas flowing to U.S. LNG export plants averaged just 3.2 bcfd (33% utilization) so far in
July, down from a 20-month low of 4.1 bcfd in June and a record high of 8.7 bcfd in February.
Utilization was about 90% in 2019.
    U.S. pipeline exports, meanwhile, were mixed.
    Refinitiv said pipeline exports to Canada averaged 2.4 bcfd so far in July, up from 2.3 bcfd in June
but still well below the all-time monthly high of 3.5 bcfd in December. Pipeline exports to Mexico,
however, averaged 5.2 bcfd so far this month, down from 5.4 bcfd in June and a record 5.6 bcfd in March.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                           Jul 3          June        Jul 3      average    
                                        (Forecast)     26(Actual)                 Jul 3     
 U.S. natgas storage (bcf):                +65            +65          +83         +68      
                                                                                            
                                                                                            
 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                              1              2            2           4            3
 U.S. GFS CDDs                             255            248          227         206          198
 U.S. GFS TDDs                             256            250          229         210          201
                                                                                            
 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              87.4           89.0         88.6        90.9         78.1
 U.S. Imports from Canada                  6.4            6.4          6.5         5.8          8.2
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.2
 Total U.S. Supply                         93.8           95.4         95.1        96.7         86.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.4            2.4          2.4         2.5          2.0
 U.S. Exports to Mexico                    5.4            5.2          5.4         5.2          4.2
 U.S. LNG Exports                          4.1            3.3          3.6         5.9          2.1
 U.S. Commercial                           4.3            4.3          4.3         4.4          4.4
 U.S. Residential                          3.5            3.5          3.5         3.6          3.5
 U.S. Power Plant                          38.9           42.4         45.2        40.3         37.2
 U.S. Industrial                           21.3           21.3         21.5        21.4         20.3
 U.S. Plant Fuel                           4.3            4.4          4.4         4.4          4.4
 U.S. Pipe Distribution                    2.0            2.1          2.2         2.1          2.1
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    74.4           78.1         81.2        76.3         72.0
 Total U.S. Demand                         86.3           89.0         92.6        89.9         80.3
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.58           1.69                              
 Transco Z6 New York NG-CG-NY-SNL        1.49           1.46                              
 PG&E Citygate NG-CG-PGE-SNL             2.01           2.15                              
 Dominion South NG-PCN-APP-SNL           1.30           1.33                              
 Chicago Citygate NG-CG-CH-SNL           1.51           1.55                              
 Algonquin Citygate NG-CG-BS-SNL         1.44           1.51                              
 SoCal Citygate NG-SCL-CGT-SNL           1.36           1.54                              
 Waha Hub NG-WAH-WTX-SNL                 1.01           1.21                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             24.50          23.75                              
 PJM West EL-PK-PJMW-SNL                27.75          29.28                              
 Ercot North EL-PK-ERTN-SNL             30.00          34.00                              
 Mid C EL-PK-MIDC-SNL                    8.50           2.05                              
 Palo Verde EL-PK-PLVD-SNL              22.50          22.25                              
 SP-15 EL-PK-SP15-SNL                   23.75          22.75                              
 
 (Reporting by Scott DiSavino; 
Editing by Nick Zieminski and Andrea Ricci)
  
 
 
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