May 22, 2020 / 2:24 PM / 11 days ago

U.S. natgas futures little changed as falling output offset demand decline

    May 22 (Reuters) - U.S. natural gas futures held steady on
Friday as forecasts for warmer weather, rising cooling demand
and a continued slowdown in output offset the drop in exports
due to demand destruction from the novel coronavirus.
    In Europe, gas prices are falling toward zero as stockpiles
fill quickly after a warm winter and demand destruction from the
pandemic. European buyers started canceling U.S.
LNG cargoes in April for delivery in June. Analysts expect those
buyers will cancel dozens of additional cargoes over the summer
since U.S. gas forwards are trading higher than European
benchmarks through at least September.
    Front-month gas futures for June delivery on the New
York Mercantile Exchange remained unchanged at $1.709 per
million British thermal units at 9:56 a.m. EDT (1356 GMT).
    For the week, the front-month was up about 4% after falling
about 10% in the prior week.
    Futures for the balance of 2020 and calendar 2021
 were trading about 27% and 54% over the front-month,
respectively, on expectations the economy will snap back once
governments lift travel restrictions.
    Data provider Refinitiv said average gas output in the U.S.
Lower 48 states fell to 89.5 billion cubic feet per day (bcfd)
so far in May, down from an eight-month low of 92.9 bcfd in
April and an all-time monthly high of 95.4 bcfd in November.
    As the weather warms with the coming of summer and consumers
crank up their air conditioners, Refinitiv projected demand in
the Lower 48, including exports, would rise from 79.0 bcfd this
week to 79.7 bcfd next week and 81.4 bcfd in early June.
    Refinitiv said U.S. pipeline exports to Canada averaged 2.2
bcfd so far in May, down from 2.4 bcfd in April and an all-time
monthly high of 3.5 bcfd in December. Pipeline exports to Mexico
averaged 4.7 bcfd in April and 4.7 bcfd so far in May, down from
a record 5.6 bcfd in March.
    U.S. LNG exports averaged 6.6 bcfd so far in May, down from
a four-month low of 8.1 bcfd in April and a record 8.7 bcfd in
February.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          May 22        May 15        May 22     average    
                                        (Forecast)      (Actual)                  May 22    
 U.S. natgas storage (bcf):                +109           +83          +110        +93      
                                                                                            
                                                                                            
 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                              18             22           44          47           40
 U.S. GFS CDDs                             137            126          107          99          101
 U.S. GFS TDDs                             155            148          151         146          141
                                                                                            
 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              90.1           88.3         87.3        88.5         77.0
 U.S. Imports from Canada                  5.8            6.0          6.1         7.8          7.8
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         95.9           94.3         93.4        95.3         84.9
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.1            2.1          2.1         2.6          1.9
 U.S. Exports to Mexico                    4.6            4.9          4.8         4.3          3.9
 U.S. LNG Exports                          6.6            5.9          5.6         5.6          2.0
 U.S. Commercial                           7.9            5.4          4.6         5.5          5.5
 U.S. Residential                          10.2           5.6          4.0         5.9          6.1
 U.S. Power Plant                          25.1           27.3         30.9        26.8         25.3
 U.S. Industrial                           22.6           21.7         21.5        21.8         20.6
 U.S. Plant Fuel                           4.5            4.4          4.3         4.3          4.5
 U.S. Pipe Distribution                    1.9            1.8          1.8         1.7          1.9
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    72.4           66.1         67.2        66.1         64.0
 Total U.S. Demand                         85.7           79.0         79.7        78.6         71.8
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.75           1.83                              
 Transco Z6 New York NG-CG-NY-SNL        1.26           1.42                              
 PG&E Citygate NG-CG-PGE-SNL             2.47           2.64                              
 Dominion South NG-PCN-APP-SNL           1.29           1.46                              
 Chicago Citygate NG-CG-CH-SNL           1.59           1.72                              
 Algonquin Citygate NG-CG-BS-SNL         1.25           1.43                              
 SoCal Citygate NG-SCL-CGT-SNL           1.69           1.88                              
 Waha Hub NG-WAH-WTX-SNL                 1.57           1.67                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             19.00          16.75                              
 PJM West EL-PK-PJMW-SNL                19.80          18.00                              
 Ercot North EL-PK-ERTN-SNL             21.50          22.00                              
 Mid C EL-PK-MIDC-SNL                                  -0.13                              
 Palo Verde EL-PK-PLVD-SNL                             11.75                              
 SP-15 EL-PK-SP15-SNL                                  11.75                              
 
 (Reporting by Scott DiSavino; Editing by Steve Orlofsky)
  
 
 
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