July 23, 2020 / 12:11 PM / 14 days ago

U.S. natgas up ahead of storage report as heat wave boosts cooling use

    July 23 (Reuters) - U.S. natural gas futures edged up on Thursday ahead of the release of a federal
storage report on expectations air conditioning demand will remain high with a heat wave blanketing much
of the country expected to run through at least early August.
    Analysts said U.S. utilities injected a near-normal 36 billion cubic feet (bcf) of gas into storage
in the week ended July 17. That compares with an increase of 44 bcf during the same week last year and a
five-year (2015-19) average build of 37 bcf for the period.
    If correct, the increase would bring stockpiles to 3.214 trillion cubic feet (tcf), 15.7% above the
five-year average of 2.779 tcf for this time of year. By the end of the injection season in October,
analysts expect U.S. inventories will reach a record high over 4.1 tcf.
    Front-month gas futures rose 0.9 cents, or 0.5%, to $1.690 per million British thermal units
at 7:57 a.m. EDT (1157 GMT).
    Data provider Refinitiv said production in the Lower 48 U.S. states had averaged 88.4 billion cubic
feet per day (bcfd) 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.
    With the weather expected to remain hot, Refinitiv projected U.S. demand, including exports, will
hold around 92.7 bcfd this week and next. The outlook for next week was a little lower than Refinitiv's
forecast on Wednesday.
    Pipeline gas flowing to U.S. LNG export plants has averaged 3.4 bcfd (35% utilization) in July, down
from a 20-month low of 4.1 bcfd in June and a record 8.7 bcfd in February. 
    The first LNG vessel since June arrived at Freeport LNG on Wednesday.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jul 17         Jul 10       Jul 17     average    
                                        (Forecast)      (Actual)                  Jul 17    
 U.S. natgas storage (bcf):                +36            +45          +44         +37      
                                                                                            
                                                                                            
 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                              1              1            2           4            2
 U.S. GFS CDDs                             236            238          220         206          201
 U.S. GFS TDDs                             237            239          222         210          203
                                                                                            
 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           88.9         88.7        90.3         78.1
 U.S. Imports from Canada                  7.0            6.8          7.0         8.1          8.2
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.2
 Total U.S. Supply                         95.0           95.6         95.7        98.4         86.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.5            2.4          2.4         2.7          2.0
 U.S. Exports to Mexico                    5.7            5.8          5.6         5.1          4.2
 U.S. LNG Exports                          3.4            3.8          4.0         6.1          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                          43.3           44.9         44.6        40.4         37.2
 U.S. Industrial                           21.5           21.4         21.4        21.5         20.3
 U.S. Plant Fuel                           4.3            4.4          4.4         4.4          4.4
 U.S. Pipe Distribution                    2.1            2.2          2.1         2.1          2.1
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    79.2           80.8         80.5        76.4         72.0
 Total U.S. Demand                         90.8           92.7         92.6        90.3         80.3
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.69           1.66                              
 Transco Z6 New York NG-CG-NY-SNL        1.75           1.75                              
 PG&E Citygate NG-CG-PGE-SNL             2.39           2.39                              
 Dominion South NG-PCN-APP-SNL           1.23           1.24                              
 Chicago Citygate NG-CG-CH-SNL           1.59           1.62                              
 Algonquin Citygate NG-CG-BS-SNL         1.57           1.55                              
 SoCal Citygate NG-SCL-CGT-SNL           1.74           1.89                              
 Waha Hub NG-WAH-WTX-SNL                 1.19           1.37                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             28.50          24.50                              
 PJM West EL-PK-PJMW-SNL                30.50          28.75                              
 Ercot North EL-PK-ERTN-SNL             31.00          24.00                              
 Mid C EL-PK-MIDC-SNL                   14.14          18.25                              
 Palo Verde EL-PK-PLVD-SNL              23.25          24.25                              
 SP-15 EL-PK-SP15-SNL                   23.75          24.75                              
 
 (Reporting by Scott DiSavino; editing by Jason Neely)
  
 
 
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