March 24, 2020 / 12:18 PM / 2 months ago

U.S. natgas futures rise from 24-year low with oil on cooler forecasts

    March 24 (Reuters) - U.S. natural gas futures on Tuesday edged up from a 24-year low in the prior
session on forecasts for cooler weather and higher demand over the next two weeks than earlier expected,
and an increase in crude prices.
    Front-month gas futures for April delivery on the New York Mercantile Exchange rose 4.3 cents,
or 2.7%, to $1.645 per million British thermal units at 8:01 a.m. EDT (1201 GMT). On Monday, the contract
closed at its lowest since September 1995. The all-time low for gas futures is $1.04 in January 1992.
    Even before the coronavirus started to cut global economic growth and energy demand as it spread, gas
prices were already trading near their lowest in years as record production and months of mild weather
enabled utilities to leave more gas in storage, making fuel shortages and price spikes unlikely this
winter.
    Looking ahead, futures for the balance of the year and calendar 2021
were up even more than the front-month on expectations low energy prices will start to boost energy
demand later this year. The premium of futures for May over April 2020 NGJ20-K20, for example, rose to
its highest since 2008 when the contracts started trading.
    With slightly cooler weather expected, Refinitiv boosted its demand expectations for the next two
weeks. The data provider now projects gas use in the U.S. Lower 48 states, including exports, will slide
from an average of 105.6 billion cubic feet per day (bcfd) this week to 101.1 bcfd next week. That
compares with Refinitiv's forecast on Monday of 105.4 bcfd this week and 100.1 bcfd next week.
    The amount of gas flowing to U.S. LNG export plants slid to 8.9 bcfd on Monday from 9.4 bcfd on
Sunday due mostly to a decline at Cheniere Energy Inc's Sabine Pass terminal in Louisiana, according to
Refinitiv. That compares with an average of 8.1 bcfd last week when fog delayed tanker traffic into
Sabine and an all-time daily high of 9.5 bcfd on Jan. 31. Some analysts noted storage at Sabine had
reached its maximum capacity.
    Gas production in the Lower 48 states eased to 93.9 bcfd on Monday from 94.0 bcfd on Sunday,
according to Refinitiv. That compares with an average of 94.1 bcfd last week and an all-time daily high
of 96.6 bcfd on Nov. 30.
    Analysts, meanwhile, said utilities likely pulled just 22 billion cubic feet (bcf) of gas from
storage during the week ended March 20. That compares with a decline of 39 bcf during the same week last
year and a five-year (2015-19) average reduction of 40 bcf for the period.
    If correct, the decrease for the week ended March 20 would bring stockpiles to 2.012 trillion cubic
feet (tcf), 17.5% above the five-year average of 1.713 tcf for this time of year.
     
                                        Week ended     Week ended    Year ago    Five-year   
                                         March 20      March 13      March 20     average    
                                        (Forecast)      (Actual)                 March 20    
 U.S. natgas storage (bcf):                -22             -9          -39          -40      
                                                                                             
                                                                                             
 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                             234            220          231          222          229
 U.S. GFS CDDs                              24             24           13          21            16
 U.S. GFS TDDs                             258            244          244          243          245
                                                                                             
 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              94.2           93.7         93.9        90.2          76.9
 U.S. Imports from Canada                  6.8            7.1          7.1          8.4          8.5
 U.S. LNG Imports                          0.0            0.0          0.0          0.0          0.2
 Total U.S. Supply                        101.0          100.8        101.0        98.6          85.6
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.8            2.5          2.6          3.0          2.6
 U.S. Exports to Mexico                    5.6            5.6          5.6          4.8          3.8
 U.S. LNG Exports                          7.8            8.9          8.8          4.0          1.8
 U.S. Commercial                           11.2           11.4         10.5        11.1          12.3
 U.S. Residential                          16.8           17.3         15.7        16.8          19.4
 U.S. Power Plant                          29.9           29.4         27.9        24.7          23.7
 U.S. Industrial                           23.2           23.3         23.0        22.9          22.6
 U.S. Plant Fuel                           4.7            4.6          4.6          4.6          4.7
 U.S. Pipe Distribution                    2.3            2.4          2.2          2.3          2.5
 U.S. Vehicle Fuel                         0.1            0.1          0.1          0.1          0.1
 Total U.S. Consumption                    88.3           88.5         84.1        82.5          85.3
 Total U.S. Demand                        104.4          105.6        101.1        94.3          93.5
                                                                                             
                                                                                             
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                          
 Hub                                   Current Day     Prior Day                             
 Henry Hub NG-W-HH-SNL                   1.70           1.76                               
 Transco Z6 New York NG-CG-NY-SNL        1.42           1.52                               
 PG&E Citygate NG-CG-PGE-SNL             2.31           2.43                               
 Dominion South NG-PCN-APP-SNL           1.33           1.33                               
 Chicago Citygate NG-CG-CH-SNL           1.49           1.55                               
 Algonquin Citygate NG-CG-BS-SNL         1.45           1.61                               
 SoCal Citygate NG-SCL-CGT-SNL           2.01           2.03                               
 Waha Hub NG-WAH-WTX-SNL                 0.47           0.51                               
                                                                                             
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                        
 Hub                                   Current Day     Prior Day                             
 New England EL-PK-NPMS-SNL             17.75          15.50                               
 PJM West EL-PK-PJMW-SNL                22.00          22.75                               
 Ercot North EL-PK-ERTN-SNL             22.00          31.75                               
 Mid C EL-PK-MIDC-SNL                   22.00          19.50                               
 Palo Verde EL-PK-PLVD-SNL              21.50          21.00                               
 SP-15 EL-PK-SP15-SNL                   21.75          27.00                               
 
 (Reporting by Scott DiSavino; Editing by Bernadette Baum)
  
 
 
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