July 30, 2020 / 2:57 PM / 6 days ago

UPDATE 3-U.S. natgas falls over 5% on milder weather outlook

 (Adds latest prices)
    July 30 (Reuters) - U.S. natural gas futures fell over 5% on Thursday on forecasts power generators
will burn less gas next week as cooling demand drops with the coming of milder weather despite a small
weekly storage build that was in line with expectations.
    The U.S. Energy Information Administration said utilities injected just 26 billion cubic feet (bcf)
of gas into storage in the week ended July 24, when consumers were still cranking up their air
conditioners to escape a heat wave that has blanketed much of the country since late June.
    That matches the 26-bcf build analysts forecast in a Reuters poll and compares with an increase of
56 bcf during the same week last year and a five-year (2015-19) average build of 33 bcf. 
    But with the weather expected to turn cooler in coming weeks, analysts said utilities would start
injecting more gas into storage than usual and inventories will reach a record high over 4.1 tcf by the
end of the injection season in October.           
    On its first day as the front-month, gas futures for the most active September contract fell
10.1 cents, or 5.2%, to settle at $1.829 per million British thermal units.
    Even though gas futures were only up about 1% so far this week, the contract has been volatile in
intraday trade after falling over 5% on Monday and rising over 5% on Wednesday.
    The premium of the October contract over September NGU20-V20, meanwhile, rose to its highest on
record as the market expects energy demand to rise as the economy rebounds later this year when
governments lift coronavirus lockdowns.
    With the weather expected to moderate, Refinitiv projected U.S. demand, including exports, will drop
from 92.3 billion cubic feet per day (bcfd) this week to 89.3 bcfd next week.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jul 24         Jul 17       Jul 24     average    
                                         (Actual)       (Actual)                  Jul 24    
 U.S. natgas storage (bcf):                +26            +37          +56         +33      
                                                                                            
                                                                                            
 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              1            1           3            3
 U.S. GFS CDDs                             216            216          219         204          197
 U.S. GFS TDDs                             217            217          220         207          200
                                                                                            
 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              89.1           89.0         88.9        91.4         78.1
 U.S. Imports from Canada                  6.8            6.8          7.0         8.1          8.2
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.2
 Total U.S. Supply                         95.9           95.8         95.9        98.4         86.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.4            2.3          2.3         2.6          2.0
 U.S. Exports to Mexico                    5.8            5.7          5.6         5.1          4.2
 U.S. LNG Exports                          3.7            3.2          4.1         5.9          2.1
 U.S. Commercial                           4.4            4.4          4.4         4.4          4.4
 U.S. Residential                          3.5            3.5          3.5         3.5          3.5
 U.S. Power Plant                          44.9           45.0         41.3        41.6         37.2
 U.S. Industrial                           21.4           21.4         21.4        21.5         20.3
 U.S. Plant Fuel                           4.4            4.4          4.4         4.4          4.4
 U.S. Pipe Distribution                    2.2            2.2          2.1         2.1          2.1
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    80.8           81.0         77.3        77.6         72.0
 Total U.S. Demand                         92.7           92.3         89.3        91.2         80.3
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.77           1.83                              
 Transco Z6 New York NG-CG-NY-SNL        1.80           1.89                              
 PG&E Citygate NG-CG-PGE-SNL             2.58           2.58                              
 Dominion South NG-PCN-APP-SNL           1.31           1.31                              
 Chicago Citygate NG-CG-CH-SNL           1.78           1.74                              
 Algonquin Citygate NG-CG-BS-SNL         1.70           1.75                              
 SoCal Citygate NG-SCL-CGT-SNL           2.59           2.57                              
 Waha Hub NG-WAH-WTX-SNL                 1.30           1.23                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             35.75          34.75                              
 PJM West EL-PK-PJMW-SNL                35.50          35.25                              
 Ercot North EL-PK-ERTN-SNL             28.00          22.25                              
 Mid C EL-PK-MIDC-SNL                   35.29          39.67                              
 Palo Verde EL-PK-PLVD-SNL              75.00          53.25                              
 SP-15 EL-PK-SP15-SNL                   63.75          48.75                              
    

 (Reporting by Scott DiSavino; Editing by Steve Orlofsky and Marguerita Choy)
  
 
 
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