July 29, 2020 / 7:05 PM / 14 days ago

UPDATE 1-U.S. natgas hits 3-week high on forecasts for warmer weather

 (Adds closing prices)
    July 29 (Reuters) - U.S. natural gas futures rose to their highest levels in three weeks on
Wednesday as forecasts for above-normal temperatures were expected to boost cooling demand, while
concerns that a storm nearing the Gulf of Mexico could affect production also provided support.
    On its last day as the front-month contract, gas futures for August delivery rose 5.4 cents,
or 3%, to settle at $1.854 per million British thermal units. Prices earlier touched their highest since
July 7 at $1.893.    
    September futures, which will soon be the front month, settled up 6.6 cents at $1.930 per
mmBtu.
    The warmer weather seen on the East Coast of the United States is supporting prices, Raymond James
analyst Muhammed Ghulam said, noting there are some concerns about the impact on offshore production due
to Atlantic storms. 
    Although weather forecasts turned less hot from the previous day, Refinitiv data showed temperatures
will remain above normal in the Lower 48 U.S. states.
    A system in the Atlantic, near Dominica, has a 90% of chance of becoming a cyclone in the next 48
hours, the U.S. National Hurricane Center said it is latest advisory.
    "There is a little bit of concern that the storm coming toward the Gulf (of Mexico) could shut down
some production," said Phil Flynn, senior analyst at Price Futures Group in Chicago. 
    Meanwhile, weekly supply was likely to rise to 96.0 billion cubic feet per day next week, up from
current week's 95.8 bcfd. 
    Refinitiv projected U.S. demand, including exports, will slide from 91.4 bcfd this week to 89.1 bcfd
next week.
    The Federal Reserve on Wednesday repeated a pledge to use its "full range of tools" to support the
U.S. economy and keep interest rates near zero for as long as it takes to recover from the fallout from
the coronavirus outbreak.
    "The economic outlook - we really need to see that improve to give us a hope of better demand going
forward," Flynn said.
    
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jul 24         Jul 17       Jul 24     average    
                                        (Forecast)      (Actual)                  Jul 24    
 U.S. natgas storage (bcf):                +26            +37          +56         +33      
                                                                                            
                                                                                            
 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            1           3            3
 U.S. GFS CDDs                             216            225          219         204          198
 U.S. GFS TDDs                             217            226          220         207          201
                                                                                            
 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              89.1           89.0         89.1        91.4         78.1
 U.S. Imports from Canada                  6.8            6.8          6.9         8.1          8.2
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.2
 Total U.S. Supply                         95.9           95.8         96.0        98.4         86.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.4            2.4          2.4         2.6          2.0
 U.S. Exports to Mexico                    5.8            5.7          5.6         5.1          4.2
 U.S. LNG Exports                          3.7            3.3          4.3         5.9          2.1
 U.S. Commercial                           4.4            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                          44.9           44.2         40.9        41.6         37.2
 U.S. Industrial                           21.4           21.4         21.4        21.5         20.3
 U.S. Plant Fuel                           4.4            4.4          4.4         4.4          4.4
 U.S. Pipe Distribution                    2.2            2.1          2.0         2.1          2.1
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    80.8           80.1         76.8        77.6         72.0
 Total U.S. Demand                         92.7           91.4         89.1        91.2         80.3
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.83           1.85                              
 Transco Z6 New York NG-CG-NY-SNL        1.89           1.89                              
 PG&E Citygate NG-CG-PGE-SNL             2.58           2.58                              
 Dominion South NG-PCN-APP-SNL           1.31           1.32                              
 Chicago Citygate NG-CG-CH-SNL           1.74           1.71                              
 Algonquin Citygate NG-CG-BS-SNL         1.75           1.73                              
 SoCal Citygate NG-SCL-CGT-SNL           2.57           2.35                              
 Waha Hub NG-WAH-WTX-SNL                 1.23           0.97                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             34.75          46.25                              
 PJM West EL-PK-PJMW-SNL                35.25          41.25                              
 Ercot North EL-PK-ERTN-SNL             22.25          25.50                              
 Mid C EL-PK-MIDC-SNL                   39.67          24.42                              
 Palo Verde EL-PK-PLVD-SNL              53.25          45.30                              
 SP-15 EL-PK-SP15-SNL                   48.75          37.25                              
 
 (Reporting by Eileen Soreng and Sumita Layek in Bengaluru; Editing by Dan Grebler and Leslie Adler)
  
 
 
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