March 26, 2020 / 2:55 PM / 6 days ago

UPDATE 2-U.S. natgas futures ease on lower demand forecasts, oil price drop

 (Adds closing prices)
    March 26 (Reuters) - U.S. natural gas futures slipped about
1% on Thursday as a near 8% drop in crude prices and forecasts
for milder weather and lower heating demand over the next two
weeks offset a slightly bigger than expected weekly storage
draw.
    The U.S. Energy Information Administration (EIA) said
utilities pulled 29 billion cubic feet (bcf) of gas from storage
during the week ended March 20.
    That was a little more than the 25-bcf draw analysts
forecast in a Reuters poll and compares with a decline of 39 bcf
during the same week last year and a five-year (2015-19) average
reduction of 40 bcf for the period.
    The decrease for the week ended March 20 reduced stockpiles
to 2.005 trillion cubic feet (tcf), 17.0% above the five-year
average of 1.713 tcf for this time of year.
    On its second to last day as the front-month, gas futures
 for April delivery on the New York Mercantile Exchange
fell 2.2 cents, or 1.3%, to settle at $1.637 per million British
thermal units (mmBtu). On Monday, the contract closed at its
lowest since September 1995.
    May futures, which will soon be the front-month, also
slipped about 1% to $1.69 per mmBtu.
    Even before the coronavirus started to cut global economic
growth and demand for energy, 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.
    With milder spring-like weather coming, data provider
Refinitiv projected gas demand in the U.S. Lower 48 states,
including exports, would slide from an average of 105.3 billion
cubic feet per day (bcfd) this week to 99.5 bcfd next week. That
is lower than Refinitiv's forecast on Wednesday of 105.5 bcfd
this week and 100.3 bcfd next week.
    The amount of gas flowing to U.S. LNG export plants eased to
9.1 bcfd on Wednesday from 9.2 bcfd on Tuesday, according to
Refinitiv. That compares with an average of 8.1 bcfd last week
when fog delayed tanker traffic to Cheniere Energy Inc's
Sabine Pass plant in Louisiana, and an all-time daily high of
9.5 bcfd on Jan. 31.
    Gas production in the Lower 48 states held at 93.0 bcfd for
a second day in a row on Wednesday, according to Refinitiv. That
compares with an average of 94.1 bcfd last week and an all-time
daily high of 96.6 bcfd on Nov. 30.
         
                                        Week ended     Week ended    Year ago    Five-year   
                                         March 20      March 13      March 20     average    
                                         (Actual)       (Actual)                 March 20    
 U.S. natgas storage (bcf):                -29             -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                             207            226          231          222          221
 U.S. GFS CDDs                              26             24           13          21            18
 U.S. GFS TDDs                             233            240          244          243          239
                                                                                             
 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           93.5         93.5        90.2          76.9
 U.S. Imports from Canada                  6.8            7.0          7.0          8.4          8.5
 U.S. LNG Imports                          0.0            0.0          0.0          0.0          0.2
 Total U.S. Supply                        101.0          100.5        100.5        98.6          85.6
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.8            2.5          2.5          3.0          2.6
 U.S. Exports to Mexico                    5.6            5.6          5.7          4.8          3.8
 U.S. LNG Exports                          7.8            9.2          9.2          4.0          1.8
 U.S. Commercial                           11.2           11.2         10.0        11.1          12.3
 U.S. Residential                          16.8           17.0         14.8        16.8          19.4
 U.S. Power Plant                          29.9           29.4         27.7        24.7          23.7
 U.S. Industrial                           23.2           23.2         22.8        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         82.1        82.5          85.3
 Total U.S. Demand                        104.4          105.3         99.5        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                   1.80           1.73                               
 Transco Z6 New York NG-CG-NY-SNL        1.39           1.64                               
 PG&E Citygate NG-CG-PGE-SNL             2.39           2.45                               
 Dominion South NG-PCN-APP-SNL           1.30           1.38                               
 Chicago Citygate NG-CG-CH-SNL           1.53           1.54                               
 Algonquin Citygate NG-CG-BS-SNL         1.54           1.64                               
 SoCal Citygate NG-SCL-CGT-SNL           1.92           1.99                               
 Waha Hub NG-WAH-WTX-SNL                 0.30           0.05                               
                                                                                             
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                        
 Hub                                   Current Day     Prior Day                             
 New England EL-PK-NPMS-SNL             19.50          18.50                               
 PJM West EL-PK-PJMW-SNL                22.50          23.25                               
 Ercot North EL-PK-ERTN-SNL             40.00          60.25                               
 Mid C EL-PK-MIDC-SNL                   16.38          21.13                               
 Palo Verde EL-PK-PLVD-SNL              14.50          15.75                               
 SP-15 EL-PK-SP15-SNL                   20.75          21.50                               
 
 (Reporting by Scott DiSavino; Editing by Marguerita Choy and
Tom Brown)
  
 
 
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