March 19, 2020 / 3:08 PM / in 12 days

UPDATE 2-U.S. natgas futures rise with jump in oil prices

 (Adds latest prices)
    March 19 (Reuters) - U.S. natural gas futures rose on Thursday with a 23% jump in oil prices and a
slightly bigger than expected weekly storage draw after three days of losses drove gas to its lowest in
24 years.
    Traders noted the increase came despite forecasts for demand over the next two weeks to fall as
pipeline flows to liquefied natural gas (LNG) export terminals decline.
    The U.S. Energy Information Administration (EIA) said utilities pulled 9 billion cubic feet (bcf) of
gas from storage during the week ended March 13.
    That is more than the 6-bcf draw analysts forecast in a Reuters poll and compares with a decline of
91 bcf during the same week last year and a five-year (2015-19) average reduction of 63 bcf for the
period.
    The decrease for the week ended March 13 cut stockpiles to 2.034 trillion cubic feet (tcf), 16.0%
above the five-year average of 1.753 tcf for this time of year.
    After falling to its lowest since September 1995 on Wednesday, front-month gas futures for
April delivery on the New York Mercantile Exchange rose 5.0 cents, or 3.1%, to settle at $1.654 per
million British thermal units.
    Oil prices, meanwhile, soared over 20% on Thursday, recouping most of their losses from a sell-off
that drove prices to near 20-year lows on Wednesday.
    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 104.2 billion cubic feet per
day (bcfd) this week to 103.0 bcfd next week. That is a big decline from Wednesday's outlook when
Refinitiv forecast demand would rise from 104.4 bcfd this week to 105.3 bcfd next week.
    Most of that demand drop comes from lower LNG exports. The amount of gas expected to flow to LNG
export plants was on track to rise to 7.1 bcfd on Thursday from a near five-month low of 6.5 bcfd on
Wednesday, according to early estimates from Refinitiv. On Wednesday, that data was pointing to flows of
8.3 bcfd on Wednesday. 
    All of that decline in gas flows was at Cheniere Energy Inc's Sabine Pass plant in Louisiana,
which took in just 1.8 bcfd on Wednesday, its lowest since April 2019. Analysts said fog was limiting
tanker traffic to the facility.
                     
                                        Week ended     Week ended    Year ago    Five-year   
                                         March 13       March 6      March 13     average    
                                         (Actual)       (Actual)                 March 13    
 U.S. natgas storage (bcf):                 -9            -48          -91          -63      
                                                                                             
                                                                                             
 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                             235            237          263          250          249
 U.S. GFS CDDs                              28             25           7           17            14
 U.S. GFS TDDs                             263            262          370          267          263
                                                                                             
 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              93.7           94.2         94.2        88.9          76.9
 U.S. Imports from Canada                  6.6            6.8          7.1          8.6          8.5
 U.S. LNG Imports                          0.1            0.0          0.0          0.0          0.2
 Total U.S. Supply                        100.5          101.0        101.3        97.5          85.6
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    3.0            2.7          2.7          2.8          2.6
 U.S. Exports to Mexico                    5.6            5.6          5.6          4.8          3.8
 U.S. LNG Exports                          8.0            7.7          7.5          5.4          1.8
 U.S. Commercial                           10.9           11.1         11.0        12.4          12.3
 U.S. Residential                          16.2           16.7         16.7        19.2          19.4
 U.S. Power Plant                          27.9           30.0         29.0        26.1          23.7
 U.S. Industrial                           23.1           23.2         23.2        23.6          22.6
 U.S. Plant Fuel                           4.6            4.7          4.7          4.7          4.7
 U.S. Pipe Distribution                    2.3            2.3          2.3          2.3          2.5
 U.S. Vehicle Fuel                         0.1            0.1          0.1          0.1          0.1
 Total U.S. Consumption                    85.0           88.2         87.1        88.4          85.3
 Total U.S. Demand                        101.6          104.2        103.0        101.4         93.5
                                                                                             
                                                                                             
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                          
 Hub                                   Current Day     Prior Day                             
 Henry Hub NG-W-HH-SNL                   1.73           1.89                               
 Transco Z6 New York NG-CG-NY-SNL        1.31           1.46                               
 PG&E Citygate NG-CG-PGE-SNL             2.80           2.84                               
 Dominion South NG-PCN-APP-SNL           1.23           1.38                               
 Chicago Citygate NG-CG-CH-SNL           1.48           1.65                               
 Algonquin Citygate NG-CG-BS-SNL         1.42           1.60                               
 SoCal Citygate NG-SCL-CGT-SNL           2.07           2.50                               
 Waha Hub NG-WAH-WTX-SNL                 0.89           0.83                               
                                                                                             
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                        
 Hub                                   Current Day     Prior Day                             
 New England EL-PK-NPMS-SNL             19.50          18.25                               
 PJM West EL-PK-PJMW-SNL                23.50          24.75                               
 Ercot North EL-PK-ERTN-SNL             24.50          26.25                               
 Mid C EL-PK-MIDC-SNL                   27.83          35.50                               
 Palo Verde EL-PK-PLVD-SNL              25.50          33.00                               
 SP-15 EL-PK-SP15-SNL                   28.00          31.50                               
 
 (Reporting by Scott DiSavino; Editing by David Gregorio and Nick Zieminski)
  
 
 
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