June 25, 2020 / 3:00 PM / 18 days ago

UPDATE 3-U.S. natgas futures plunge to near 25-year low as stockpiles fill

 (Adds latest prices, details from Goldman analysts)
    June 25 (Reuters) - U.S. natural gas futures collapsed over 7% to a near 25-year low on Thursday as
demand destruction from the coronavirus left the world awash in the fuel that utilities have squeezed
into storage caverns expected to be full by the end of the summer season.
    The U.S. Energy Information Administration said U.S. utilities injected 120 billion cubic feet (bcf)
of gas into storage during the week ended June 19.
    That was much bigger than the 106-bcf build analysts forecast in a Reuters poll and compares with an
increase of 103 bcf during the same week last year and a five-year (2015-19) average build of 73 bcf for
the period. Analysts said much of the surplus gas came from the cancellation of dozens of U.S. liquefied
natural gas (LNG) cargoes in recent weeks.
    The storage increase boosted stockpiles to 3.012 trillion cubic feet (tcf), 18.3% above the
five-year average of 2.546 tcf for this time of year. By the end of the injection season in October,
analysts expect U.S. inventories will reach a record 4.1 tcf.
    On its second-to-last day as the front-month, gas futures for July delivery fell 11.5 cents,
or 7.2%, to settle at $1.482 per million British thermal units (mmBtu), their lowest since August 1995.
    August futures, which will soon be the front-month, fell almost 12 cents to $1.55 per mmBtu.
    Stockpiles are filling despite a drop in output this year. Refinitiv said production in the Lower 48
U.S. states averaged 87.5 billion cubic feet per day (bcfd) in June, down from a 16-month low of 87.9
bcfd in May.
    Analysts at Goldman Sachs boosted their end of season storage forecasts and cut their price
forecasts for later in 2020 as LNG cancellations added more gas to U.S. stockpiles than the bank
projected previously. Goldman forecast U.S. LNG exports would bottom at 4.0 bcfd in June before rising
to record highs over 10.0 bcfd in November and December.
    The amount of pipeline gas flowing to U.S. liquefied natural gas export plants dropped to an average
of 4.1 bcfd (42% utilization) in June, according to Refinitiv data, down from an eight-month low of 6.4
bcfd in May and a record high of 8.7 bcfd in February. Utilization was about 90% in calendar 2019.

    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jun 19         Jun 12       Jun 19     average    
                                         (Actual)       (Actual)                  Jun 19    
 U.S. natgas storage (bcf):                +120           +85          +103        +73      
                                                                                            
                                                                                            
 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                              2              2            5           7            5
 U.S. GFS CDDs                             212            210          193         188          184
 U.S. GFS TDDs                             214            212          198         195          189
                                                                                            
 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              88.0           87.4         87.3        90.9         77.5
 U.S. Imports from Canada                  5.8            6.4          6.6         7.2          7.9
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         93.8           93.7         93.9        98.1         85.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.2            2.3          2.3         2.2          1.9
 U.S. Exports to Mexico                    5.2            5.5          5.3         5.3          4.1
 U.S. LNG Exports                          3.8            4.1          4.4         5.9          1.9
 U.S. Commercial                           4.5            4.4          4.3         4.4          4.7
 U.S. Residential                          3.8            3.5          3.5         3.6          4.1
 U.S. Power Plant                          30.5           37.1         38.2        34.1         31.0
 U.S. Industrial                           21.4           21.3         21.4        21.3         20.4
 U.S. Plant Fuel                           4.3            4.3          4.3         4.4          4.5
 U.S. Pipe Distribution                    1.8            1.9          2.0         1.9          1.9
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    66.5           72.7         73.8        69.8         66.7
 Total U.S. Demand                         77.8           84.7         85.8        83.2         74.6
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.64           1.61                              
 Transco Z6 New York NG-CG-NY-SNL        1.51           1.55                              
 PG&E Citygate NG-CG-PGE-SNL             2.36           2.38                              
 Dominion South NG-PCN-APP-SNL           1.55           1.42                              
 Chicago Citygate NG-CG-CH-SNL           1.59           1.52                              
 Algonquin Citygate NG-CG-BS-SNL         1.57           1.68                              
 SoCal Citygate NG-SCL-CGT-SNL           1.85           1.98                              
 Waha Hub NG-WAH-WTX-SNL                 1.45           1.45                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             22.00          24.25                              
 PJM West EL-PK-PJMW-SNL                19.50          26.50                              
 Ercot North EL-PK-ERTN-SNL             18.50          20.00                              
 Mid C EL-PK-MIDC-SNL                   17.83           8.79                              
 Palo Verde EL-PK-PLVD-SNL              26.00          29.50                              
 SP-15 EL-PK-SP15-SNL                   26.25          29.75                              
 
 (Reporting by Scott DiSavino;
Editing by Nick Zieminski, Dan Grebler, Jonathan Oatis and Marguerita Choy)
  
 
 
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