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Energy

UPDATE 2-U.S. natgas futures drops 4% as output rises, demand slides

 (Adds latest prices)
    Aug 10 (Reuters) - U.S. natural gas futures fell almost 4% on Monday on forecasts for slightly lower
demand over the next two weeks than previously expected and a slow increase in output after prices
jumped to a seven-month high last week.
    Traders noted futures soared last week in part because the market was no longer concerned prices
will have to drop later this year to encourage producers to shut wells to prevent stockpiles from
reaching tank tops. That is because power generators burned record amounts of gas during the hot summer
to keep air conditioners humming and LNG exports are now picking up.
    Front-month gas futures fell 8.5 cents, or 3.8%, to settle at $2.153 per million British
thermal units. On Friday, the contract closed at its highest since Dec. 26.
    Speculators last week boosted their long positions on the NYMEX for an eighth week in a row to their
highest since November 2018 on expectations energy demand will rise as the economy rebounds when state
governments lift more coronavirus-linked lockdowns.
    Data provider Refinitiv said average U.S. production rose to 88.7 billion cubic feet per day (bcfd)
from 88.1 bcfd in July. That is still well below November's all-time monthly high of 95.4 bcfd.
    U.S. LNG exports in August were on track to rise for the first time in six months. Pipeline gas
flowing to the plants climbed to 4.1 bcfd in August from a 21-month low of 3.3 bcfd in July, when buyers
canceled dozens of cargoes - the most in a month.
    Refinitiv projected U.S. demand, including exports, will rise from an average of 89.1 bcfd this week
to 90.0 bcfd next week. But that is lower than Refinitiv's outlook on Friday because last week's higher
gas prices will cause some power generators to burn more coal instead of gas.
            
                                       Week ended      Week ended    Year ago   Five-year   
                                           Aug 7         Jul 31       Jul 31     average    
                                        (Forecast)      (Actual)                  Jul 31    
 U.S. natgas storage (bcf):                +52            +33          +51         +44 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              2            1           4            4
 U.S. GFS CDDs                             224            215          211         192          186
 U.S. GFS TDDs                             225            217          212         196          190
                                                                                            
 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              88.3           89.1         88.8        92.6         79.1
 U.S. Imports from Canada                  6.7            6.5          6.5         7.8          8.0
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.2
 Total U.S. Supply                         95.0           95.6         95.4       100.4         87.3
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.1            1.9          1.9         2.9          2.2
 U.S. Exports to Mexico                    5.8            5.6          5.7         5.4          4.4
 U.S. LNG Exports                          3.9            4.5          4.9         4.1          2.0
 U.S. Commercial                           4.4            4.4          4.5         4.4          4.5
 U.S. Residential                          3.6            3.5          3.5         3.5          3.3
 U.S. Power Plant                          40.5           41.1         41.3        42.5         36.6
 U.S. Industrial                           21.4           21.5         21.6        21.5         20.6
 U.S. Plant Fuel                           4.4            4.4          4.4         4.4          4.3
 U.S. Pipe Distribution                    2.0            2.1          2.1         2.1          2.0
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    76.5           77.1         77.4        78.5         71.4
 Total U.S. Demand                         88.2           89.1         90.0        90.9         80.0 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   2.15           2.26                              
 Transco Z6 New York NG-CG-NY-SNL        1.36           1.34                              
 PG&E Citygate NG-CG-PGE-SNL             2.60           2.72                              
 Dominion South NG-PCN-APP-SNL           1.19           1.31                              
 Chicago Citygate NG-CG-CH-SNL           1.89           1.94                              
 Algonquin Citygate NG-CG-BS-SNL         1.47           1.42                              
 SoCal Citygate NG-SCL-CGT-SNL           1.92           1.99                              
 Waha Hub NG-WAH-WTX-SNL                 0.36           0.93 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             20.50          22.50                              
 PJM West EL-PK-PJMW-SNL                24.50          25.25                              
 Ercot North EL-PK-ERTN-SNL             27.79          23.00                              
 Mid C EL-PK-MIDC-SNL                   26.88          18.13                              
 Palo Verde EL-PK-PLVD-SNL              23.50          24.75                              
 SP-15 EL-PK-SP15-SNL                   24.00          24.75                              
 
 (Reporting by Scott DiSavino; Editing by Steve Orlofsky, David Gregorio and Richard Chang)
  
 
 
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