July 14, 2020 / 12:03 PM / a month ago

U.S. natgas futures slip on rising output, low LNG exports

    July 14 (Reuters) - U.S. natural gas futures slipped on Tuesday as output slowly rose and liquefied
natural gas exports (LNG) remained at their lowest since early 2018 due to a global hit to demand from
the coronavirus pandemic.
    Traders noted prices were down despite forecasts for more hot weather and higher cooling demand over
the next two weeks and an increase in pipeline exports to Canada and Mexico.
    Front-month gas futures fell 2.1 cents, or 1.2%, to $1.718 per million British thermal units
at 7:50 a.m. EDT (1150 GMT).
    Refinitiv said production in the Lower 48 U.S. states averaged 88.1 billion cubic feet per day
(bcfd) so far in July, up from a 20-month low of 87.0 bcfd in June but still well below the all-time
monthly high of 95.4 bcfd in November.
    Refinitiv forecast U.S. demand, including exports, will rise from 90.4 bcfd this week to 92.9 bcfd
next week. That was higher than Refinitiv's outlook on Monday.
    Pipeline gas flowing to U.S. LNG export plants averaged just 3.2 bcfd (33% utilization) so far in
July, down from a 20-month low of 4.1 bcfd in June and a record high of 8.7 bcfd in February.
Utilization was about 90% in 2019. Flows to Freeport in Texas held at zero for an eighth straight day
for the first time since July 2019 when the first of its three liquefaction trains was in test mode.

    U.S. pipeline exports, meanwhile, rose as consumers in neighboring countries cranked up their air
conditioners.
    Refinitiv said pipeline exports to Canada averaged 2.5 bcfd so far in July, up from 2.3 bcfd in
June, but still below the all-time monthly high of 3.5 bcfd in December. Pipeline exports to Mexico
averaged 5.5 bcfd this month, up from 5.4 bcfd in June, but below the record 5.6 bcfd in March.
        
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jul 10         Jul 3        Jul 10     average    
                                        (Forecast)      (Actual)                  Jul 10    
 U.S. natgas storage (bcf):                +43            +56          +67         +63      
                                                                                            
                                                                                            
 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            2           4            2
 U.S. GFS CDDs                             252            247          220         206          202
 U.S. GFS TDDs                             254            249          222         210          204
                                                                                            
 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              88.2           87.9         87.9        89.1         78.1
 U.S. Imports from Canada                  6.6            7.1          7.0         8.2          8.2
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.2
 Total U.S. Supply                         94.9           95.0         94.8        97.3         86.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.4            2.6          2.5         2.6          2.0
 U.S. Exports to Mexico                    5.4            5.6          5.5         4.7          4.2
 U.S. LNG Exports                          3.1            3.4          3.6         5.9          2.1
 U.S. Commercial                           4.3            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                          42.7           42.9         45.3        42.3         37.2
 U.S. Industrial                           21.3           21.5         21.5        21.5         20.3
 U.S. Plant Fuel                           4.4            4.3          4.3         4.3          4.4
 U.S. Pipe Distribution                    2.1            2.1          2.2         2.1          2.1
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    78.4           78.9         81.3        78.2         72.0
 Total U.S. Demand                         89.4           90.4         92.9        91.4         80.3
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.75           1.79                              
 Transco Z6 New York NG-CG-NY-SNL        1.68           1.67                              
 PG&E Citygate NG-CG-PGE-SNL             2.69           2.71                              
 Dominion South NG-PCN-APP-SNL           1.31           1.22                              
 Chicago Citygate NG-CG-CH-SNL           1.71           1.69                              
 Algonquin Citygate NG-CG-BS-SNL         1.50           1.52                              
 SoCal Citygate NG-SCL-CGT-SNL           2.31           2.16                              
 Waha Hub NG-WAH-WTX-SNL                 1.39           1.57                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             23.75          25.50                              
 PJM West EL-PK-PJMW-SNL                30.50          28.25                              
 Ercot North EL-PK-ERTN-SNL             25.50          40.50                              
 Mid C EL-PK-MIDC-SNL                   17.67          19.00                              
 Palo Verde EL-PK-PLVD-SNL              46.75          69.33                              
 SP-15 EL-PK-SP15-SNL                   32.00          42.00                              
 
 (Reporting by Scott DiSavino; Editing by Bernadette Baum)
  
 
 
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