June 9, 2020 / 12:14 PM / 23 days ago

U.S. natgas futures little changed as slowing output offsets lower demand

    June 9 (Reuters) - U.S. natural gas futures were little changed on Tuesday as a slowdown in output
offset forecasts for lower air conditioning demand and a drop in liquefied natural gas exports.
    Front-month gas futures remained unchanged at $1.787 per million British thermal units at
7:54 a.m. EDT (1154 GMT).
    Looking ahead, futures for the balance of 2020 and calendar 2021 were trading
about 23% and 47% over the front month, respectively, on hopes the economy will snap back as governments
lift coronavirus-linked travel restrictions.
    Refinitiv said gas production in the U.S. Lower 48 states has fallen to an average of 88.5 billion
cubic feet per day (bcfd) so far in June from a one-year low of 89.2 bcfd in May and an all-time monthly
high of 95.4 bcfd in November.
    With the coming of milder weather in mid-June, Refinitiv projected U.S. demand, including exports,
would slide from 81.4 bcfd this week to 79.8 bcfd next week.
    The amount of pipeline gas flowing to U.S. LNG export plants has fallen to an average of 4.2 bcfd so
far in June, down from an eight-month low of 6.4 bcfd in May and a monthly record high of 8.7 bcfd in
February. 
    Analysts said U.S. LNG exports dropped in recent months as buyers canceled cargoes due to record low
gas prices in Europe and Asia. Earlier in June, prices at major European benchmarks
 were trading higher than U.S. gas. But this week, U.S. gas started trading at
a premium to Europe for July and August.
    When U.S. gas was trading at a premium to the European benchmarks in May, some energy firms decided
to send at least a couple of cargoes to the United States for storage.
            
                                       Week ended      Week ended    Year ago   Five-year   
                                           Jun 5        May 29        Jun 5      average    
                                         (Actual)       (Actual)                  Jun 5     
 U.S. natgas storage (bcf):                +104           +102         +107        +94      
                                                                                            
                                                                                            
 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                              8              10           14          14           14
 U.S. GFS CDDs                             178            168          137         158          147
 U.S. GFS TDDs                             186            178          151         172          163
                                                                                            
 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              88.7           88.4         88.5        90.0         77.5
 U.S. Imports from Canada                  6.2            6.1          6.6         7.9          7.9
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         95.0           94.6         95.1        97.9         85.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.2            2.4          2.4         2.5          1.9
 U.S. Exports to Mexico                    5.1            5.2          5.0         5.0          4.1
 U.S. LNG Exports                          5.2            4.0          4.2         5.3          1.9
 U.S. Commercial                           4.6            4.5          4.5         4.6          4.7
 U.S. Residential                          3.9            3.8          3.8         3.9          4.1
 U.S. Power Plant                          32.3           33.9         32.4        31.3         31.0
 U.S. Industrial                           21.3           21.3         21.4        21.3         20.4
 U.S. Plant Fuel                           4.4            4.4          4.4         4.4          4.5
 U.S. Pipe Distribution                    1.8            1.9          1.8         1.8          1.9
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    68.6           69.9         68.3        67.4         66.7
 Total U.S. Demand                         81.1           81.4         79.8        80.2         74.6
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.68           1.80                              
 Transco Z6 New York NG-CG-NY-SNL        1.57           1.34                              
 PG&E Citygate NG-CG-PGE-SNL             2.48           2.47                              
 Dominion South NG-PCN-APP-SNL           1.45           1.31                              
 Chicago Citygate NG-CG-CH-SNL           1.62           1.59                              
 Algonquin Citygate NG-CG-BS-SNL         1.66           1.59                              
 SoCal Citygate NG-SCL-CGT-SNL           2.15           2.05                              
 Waha Hub NG-WAH-WTX-SNL                 1.29           1.44                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             23.75          24.00                              
 PJM West EL-PK-PJMW-SNL                24.00          22.50                              
 Ercot North EL-PK-ERTN-SNL             29.00          28.00                              
 Mid C EL-PK-MIDC-SNL                   14.79           1.57                              
 Palo Verde EL-PK-PLVD-SNL              23.50          16.00                              
 SP-15 EL-PK-SP15-SNL                   23.75          12.50                              
 
 (Reporting by Scott DiSavino
Editing by Paul Simao)
  
 
 
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