July 22, 2020 / 7:20 PM / 15 days ago

UPDATE 2-U.S. natgas futures flat; summer heat should keep air conditioners cranked

 (Adds Freeport LNG)
    July 22 (Reuters) - U.S. natural gas futures were little changed on Wednesday on forecasts for the
heat wave blanketing much of the country to continue through early August, keeping air-conditioning
demand strong.
    Front-month gas futures rose 0.6 cents, or 0.4%, to settle at $1.681 per million British
thermal units.
    Looking ahead, futures for the balance of 2020 were trading 27% over the front-month,
while futures for calendar 2021 had a premium of 54%, as traders expected energy demand to
rise as the economy rebounds from lockdowns during the pandemic.
    Data provider Refinitiv projected U.S. demand, including exports, will hold around 92.7 billion
cubic feet per day (bcfd) this week and next. The outlook for next week was lower than Refinitiv's
forecast on Tuesday.
    The power industry was expected to consume more than half of that gas to keep air conditioners
humming, gobbling up a one-day record of 47.5 bcfd on Monday.
    Pipeline gas flowing to U.S. LNG export plants averaged 3.4 bcfd (35% utilization) so far in July,
down from a 20-month low of 4.1 bcfd in June and a record 8.7 bcfd in February. Utilization was about
90% in 2019. The first LNG vessel since June arrived at Freeport LNG on Wednesday, while the amount of
gas flowing the plant held at zero for a 16th straight day for the first time since July 2019 the plant
was in test mode.
    U.S. pipeline exports, meanwhile, rose as consumers in neighbouring countries cranked up their air
conditioners.
    Refinitiv said pipeline exports to Canada averaged 2.4 bcfd so far in July, up from 2.3 bcfd in
June, but still below the all-time monthly high of 3.5 bcfd in December. Pipeline exports to Mexico
averaged 5.60 bcfd so far this month, up from 5.44 bcfd in June and on track to top the record 5.55 bcfd
in March.
    
                                       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                             238            243          220         206          201
 U.S. GFS TDDs                             239            244          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            6.9          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           95.7         95.8        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            5.7          5.6         5.1          4.2
 U.S. LNG Exports                          3.4            3.7          4.1         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         44.7        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            2.1          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         80.7        76.4         72.0
 Total U.S. Demand                         90.8           92.7         92.8        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                   1.66           1.71                              
 Transco Z6 New York NG-CG-NY-SNL        1.75           1.75                              
 PG&E Citygate NG-CG-PGE-SNL             2.39           2.41                              
 Dominion South NG-PCN-APP-SNL           1.24           1.31                              
 Chicago Citygate NG-CG-CH-SNL           1.62           1.58                              
 Algonquin Citygate NG-CG-BS-SNL         1.55           1.67                              
 SoCal Citygate NG-SCL-CGT-SNL           1.89           1.90                              
 Waha Hub NG-WAH-WTX-SNL                 1.37           1.41                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             24.50          28.25                              
 PJM West EL-PK-PJMW-SNL                28.75          41.25                              
 Ercot North EL-PK-ERTN-SNL             24.00          24.25                              
 Mid C EL-PK-MIDC-SNL                   18.25          21.06                              
 Palo Verde EL-PK-PLVD-SNL              24.25          28.50                              
 SP-15 EL-PK-SP15-SNL                   24.75          28.50                              
 
 (Reporting by Scott DiSavino; editing by Emelia Sithole-Matarise and David Gregorio)
  
 
 
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