June 26, 2020 / 7:09 PM / 5 days ago

UPDATE 1-U.S. natgas edges up from 25-year low as output slows, exports rise

 (Adds closing prices, quote)
    June 26 (Reuters) - U.S. natural gas futures edged up on Friday from a near 25-year low due to a
continued slowdown in output, a small rise in pipeline and liquefied natural gas (LNG) exports over the
past week and an increase in cooling demand with the coming of hot summer weather.
    That price increase came despite ongoing demand destruction from the coronavirus, swelling
stockpiles and a collapse in LNG exports earlier in the month.
    On its last day as the front-month, gas futures for July delivery rose 1.3 cents, or 0.9%, to
settle at $1.495 per million British thermal units (mmBtu). On Thursday, the contract settled at its
lowest since August 1995 following a bigger-than-expected weekly storage build.
    "If you were looking for a dead cat bounce, we got more of a dead cat splat," said Phil Flynn, Price
Futures Group senior market analyst. "Everyone was hoping we'd get a bottom, but the (storage) injection
number is too overwhelming to ignore."
    August futures, which will soon be the front-month, were flat at $1.54 per mmBtu. Futures
spreads, meanwhile, surged to records as investors bet demand will rebound later this year as the
pandemic wanes.
    With ongoing government lockdowns keeping many businesses shut and U.S. LNG exports down by half
since the start of the year, stockpiles are filling fast and are expected to reach a record 4.1 trillion
cubic feet by the end of October.
    Refinitiv said production in the Lower 48 U.S. states averaged 87.7 billion cubic feet per day
(bcfd) in June, down from a 16-month low of 88.2 bcfd in May and an all-time monthly high of 95.4 bcfd
in November.
    As the weather heats up, Refinitiv forecasts U.S. demand, including exports, would rise from 84.8
bcfd this week to 86.2 bcfd next week and 89.4 bcfd in two weeks.
    Pipeline gas flowing to U.S. LNG export plants averaged 4.1 bcfd (42% utilization) in June, down
from an eight-month low of 6.4 bcfd in May and a record high of 8.7 bcfd in February. Utilization was
90% in 2019.
    On a daily basis, however, LNG exports rose to a three-week high of 4.9 bcfd on Thursday as flows to
Cameron in Louisiana hit a record high. That is up from a 14-month low of 3.6 bcfd last week.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jun 26         Jun 19       Jun 26     average    
                                        (Forecast)      (Actual)                  Jun 26    
 U.S. natgas storage (bcf):                +77            +120         +92         +65      
                                                                                            
                                                                                            
 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                              3              2            5           7            5
 U.S. GFS CDDs                             218            212          193         188          186
 U.S. GFS TDDs                             221            214          198         195          191
                                                                                            
 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           87.9         87.5        90.9         77.5
 U.S. Imports from Canada                  5.8            6.4          6.5         7.2          7.9
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         93.8           94.3         94.0        98.1         85.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.2            2.3          2.3         2.2          1.9
 U.S. Exports to Mexico                    5.2            5.5          5.4         5.3          4.1
 U.S. LNG Exports                          3.8            4.1          4.4         5.9          1.9
 U.S. Commercial                           4.5            4.4          4.3         4.4          4.7
 U.S. Residential                          3.8            3.5          3.5         3.6          4.1
 U.S. Power Plant                          30.5           37.2         38.5        34.1         31.0
 U.S. Industrial                           21.4           21.3         21.4        21.3         20.4
 U.S. Plant Fuel                           4.3            4.3          4.3         4.4          4.5
 U.S. Pipe Distribution                    1.8            1.9          2.0         1.9          1.9
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    66.5           72.8         74.1        69.8         66.7
 Total U.S. Demand                         77.8           84.8         86.2        83.2         74.6
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.53           1.64                              
 Transco Z6 New York NG-CG-NY-SNL        1.39           1.51                              
 PG&E Citygate NG-CG-PGE-SNL             2.24           2.36                              
 Dominion South NG-PCN-APP-SNL           1.28           1.55                              
 Chicago Citygate NG-CG-CH-SNL           1.46           1.59                              
 Algonquin Citygate NG-CG-BS-SNL         1.54           1.57                              
 SoCal Citygate NG-SCL-CGT-SNL           1.72           1.85                              
 Waha Hub NG-WAH-WTX-SNL                 1.35           1.45                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             25.50          22.00                              
 PJM West EL-PK-PJMW-SNL                23.18          19.50                              
 Ercot North EL-PK-ERTN-SNL             17.25          18.50                              
 Mid C EL-PK-MIDC-SNL                   15.50          17.83                              
 Palo Verde EL-PK-PLVD-SNL              24.00          26.00                              
 SP-15 EL-PK-SP15-SNL                   26.25          26.25                              
 
 (Reporting by Scott DiSavino; Editing by Andrea Ricci)
  
 
 
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