January 26, 2016 / 2:38 PM / 2 years ago

U.S. natgas futures little changed on mixed weather forecasts

Jan 26 (Reuters) - U.S. natural gas futures were on trading within a few cents
of unchanged early on Tuesday for the fifth day in a row on forecasts for mixed, but
still warmer-than-normal weather over the next two weeks.
    On its second-to-last day as the front month, February futures on the New York
Mercantile Exchange were up 2.6 cents, or 1.2 percent, at $2.184 per million
British thermal units at 9:09 a.m. EST (1409 GMT).
    That small gain, however, put the front month on track for its fifth straight
day of increases, albeit tiny ones. Still, that is its longest winning streak since
    The March contract, meanwhile, which will be the front month in a few days, was
trading up 1.7 cents at $2.172 early Tuesday.
    "With about two months left to winter and with extreme weather not forecast ...
the market is likely to remain within the boundaries of the wide trading range it
has been in since December," Dominick Chirichella, senior partner at the Energy
Management Institute in New York, said in a note.
    That trading range is bounded by about $2.50 per mmBtu on the upper resistance
end and around $1.70 on the lower support side, Chirichella said.
    Both the U.S. and European weather models show temperatures remaining slightly
warmer than normal through mid-February. The U.S. model called for warmer weather
over the next two weeks, while the European model called for cooler weather during
that time.
    Even though heating demand has been light so far this winter because the weather
has been about 13 percent warmer than the 30-year norm and 17 percent warmer than
the polar vortex of 2014-2015, gas usage was the same as last year and 7 percent
higher than usual, according to data from Thomson Reuters Analytics.
    That high usage was because the power sector is burning record amounts of the
fuel to generate electricity since gas remains relatively cheap compared with coal,
which carries higher environmental and transport costs.
    So far in January, the power sector has burned on average 25.7 billion cubic
feet of gas per day, according to Thomson Reuters Analytics, putting it on track to
top the record 23.0 bcfd it burned last January.
    It makes sense for generators to burn gas instead of coal when the gas premium
over coal is less than $1 per mmBtu as it has been since August and most of the rest
of 2015.
                                        Week ended   Week ended   Year    Five-year
                                          Jan. 22     Jan. 15      Ago     Average
 U.S. natgas storage (in bcf):             -210         -178      -112       -170
 Heating & Cooling Degree Days                                                      
 Two-Week Average                       Current Day  Prior Day   30-Year            
 GFS HDDs                                   417         429        440              
 GFS CDDs                                    1           1          3               
 EC HDDs                                    394         381        412              
 EC CDDs                                     1           1          2               
 GFS Gas Consumption                                                                
 Two-Week Average                       Current Day  Prior Day   30-Year            
 Residential                               27.4         28.2      28.5              
 Commercial                                15.8         16.2      16.1              
 Power                                     24.9         25.1      19.5              
 Industrial                                22.4         22.5      24.3              
 Total                                     90.5         92.0      88.4              
 EC Gas Consumption                                                                 
 Two-Week Average                       Current Day  Prior Day   30-Year            
 Residential                               27.5         26.7      28.5              
 Commercial                                15.8         15.4      16.2              
 Power                                     25.1         25.0      19.5              
 Industrial                                22.4         22.2      24.3              
 Total                                     90.7         89.4      88.4              
 Thomson Reuters Supply Estimates                                                   
                                        Current Day  Prior Day    Prior   High since
                                                                  Year       2011
 U.S. Lower 48 production                  71.7         71.9      73.6       75.2
 Net U.S. imports from Canada               6.1         5.9        6.4       8.3
 U.S. LNG imports                           0.4         0.5        0.8       2.8
 U.S. LNG exports                                                         
 U.S. exports to Mexico                     2.9         2.9        2.7       4.3
 ICE U.S. Natural Gas Next-Day Prices                                               
 ($ per mmBtu):                                                           
 Hub                                    Current Day  Prior Day                      
 Algonquin E-ALGCIT-IDX                               3.59                        
 Dominion South E-DOMSP-IDX                           1.41                        
 New York E-TSCO6NY-IDX                               2.68                        
 Henry Hub GT-HH-IDX                                  2.14                        
 Chicago MC-CHICIT-IDX                                2.17                        
 SoCal Border W-SOBOR-IDX                             2.22                        
 ICE U.S. Power Next-Day Prices                                                     
 ($ per megawatt-hour):                                                   
 Hub                                    Current Day  Prior Day                      
 Ercot North SE-ERCONP-IDX                           21.44                        
 Mid C W-MIDCP-IDX                                   20.23                        
 New England E-NEPLMHP-IDX                           40.72                        
 Palo Verde W-PVP-IDX                                20.10                        
 PJM West E-PJWHRTP-IX                               31.14                        
 SP-15 W-SP15-IDX                                                                 
 (Reporting by Scott DiSavino; Editing by Lisa Von Ahn)

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