June 26, 2020 / 12:44 PM / 7 days ago

U.S. natgas futures slide to fresh 25-year low as stockpiles fill

    June 26 (Reuters) - U.S. natural gas futures slipped to a
fresh near 25-year low on Friday as the market focuses on demand
destruction from the coronavirus, swelling stockpiles and lower
liquefied natural gas exports earlier in the month.
    That price decline, however, comes despite a slowdown in
output, a rise in pipeline and LNG exports over the past week
and an increase in cooling demand with the coming of hot summer
weather.
    On its last day as the front-month, gas futures for
July fell 2.4 cents, or 1.6%, to $1.458 per million British
thermal units at 8:08 a.m. EDT (GMT), their lowest since August
1995.
    August futures, which will soon be the front-month,
were flat at $1.54 per mmBtu.
    With ongoing government lockdowns keeping many businesses
shut and U.S. LNG exports down by half since the start of the
year, stockpiles are filling fast and are expected to reach a
record 4.1 trillion cubic feet by the end of October.

    Refinitiv said production in the Lower 48 U.S. states
averaged 87.7 billion cubic feet per day (bcfd) in June, down
from a 16-month low of 88.2 bcfd in May and an all-time monthly
high of 95.4 bcfd in November.
    As the weather heats up, Refinitiv forecast U.S. demand,
including exports, would rise from 84.8 bcfd this week to 86.2
bcfd next week and 89.4 bcfd in two weeks.
    Pipeline gas flowing to U.S. LNG export plants averaged 4.1
bcfd (42% utilization) in June, down from an eight-month low of
6.4 bcfd in May and a record high of 8.7 bcfd in February.
Utilization was 90% in 2019.
    On a daily basis, however, LNG exports rose to a three-week
high of 4.9 bcfd on Thursday as flows to Cameron in Louisiana
hit a record high. That is up from a 14-month low of 3.6 bcfd
last week.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jun 26         Jun 19       Jun 26     average    
                                        (Forecast)      (Actual)                  Jun 26    
 U.S. natgas storage (bcf):                +77            +120         +92         +65      
                                                                                            
                                                                                            
 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                              3              2            5           7            5
 U.S. GFS CDDs                             218            212          193         188          186
 U.S. GFS TDDs                             221            214          198         195          191
                                                                                            
 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           87.9         87.5        90.9         77.5
 U.S. Imports from Canada                  5.8            6.4          6.5         7.2          7.9
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         93.8           94.3         94.0        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          5.4         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           37.2         38.5        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           72.8         74.1        69.8         66.7
 Total U.S. Demand                         77.8           84.8         86.2        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                   1.53           1.64                              
 Transco Z6 New York NG-CG-NY-SNL        1.39           1.51                              
 PG&E Citygate NG-CG-PGE-SNL             2.24           2.36                              
 Dominion South NG-PCN-APP-SNL           1.28           1.55                              
 Chicago Citygate NG-CG-CH-SNL           1.46           1.59                              
 Algonquin Citygate NG-CG-BS-SNL         1.54           1.57                              
 SoCal Citygate NG-SCL-CGT-SNL           1.72           1.85                              
 Waha Hub NG-WAH-WTX-SNL                 1.35           1.45                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             25.50          22.00                              
 PJM West EL-PK-PJMW-SNL                23.18          19.50                              
 Ercot North EL-PK-ERTN-SNL             17.25          18.50                              
 Mid C EL-PK-MIDC-SNL                   15.50          17.83                              
 Palo Verde EL-PK-PLVD-SNL              24.00          26.00                              
 SP-15 EL-PK-SP15-SNL                   26.25          26.25                              
 
 (Reporting by Scott DiSavino)
  
 
 
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