July 27, 2020 / 3:38 PM / 18 days ago

UPDATE 2-U.S. natgas drops over 4% as output rises, cooling demand eases

 (Adds latest prices, quote)
    July 27 (Reuters) - U.S. natural gas futures dropped over 4% on Monday as output slowly rises and
cooling demand eases, keeping the amount of gas utilities inject into storage on track to reach a record
high this year.
    Even though meteorologists projected temperatures will remain warmer-than-normal through at least
mid-August, they also predicted the hottest days of summer were past. The weather over much of the
United States has been hotter-than-normal every day since late June.
    "Natural gas prices are in trouble as the heatwave could break," Phil Flynn, senior analyst at Price
Futures Group in Chicago, said, advising traders to "buy puts."
    Front-month gas futures fell 7.4 cents, or 4.1%, to settle at $1.734 per million British
thermal units, which is only the lowest close since July 22 after the contract gained over 5% last week.
    Refinitiv said production in the Lower 48 U.S. states averaged 88.5 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.
    Refinitiv projected U.S. demand, including exports, will slide from 91.5 bcfd this week to 90.8 bcfd
next week.
    Pipeline gas flowing to U.S. LNG export plants averaged 3.3 bcfd (34% 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.
    U.S. pipeline exports, meanwhile, rose as consumers in neighboring 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 5.63 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 24         Jul 17       Jul 24     average    
                                        (Forecast)      (Actual)                  Jul 24    
 U.S. natgas storage (bcf):                +29            +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            2
 U.S. GFS CDDs                             228            235          219         207          199
 U.S. GFS TDDs                             229            236          220         210          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              89.0           89.1         88.9        91.4         78.1
 U.S. Imports from Canada                  6.8            6.7          7.0         8.1          8.2
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.2
 Total U.S. Supply                         95.8           95.8         95.9        98.4         86.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.4            2.5          2.5         2.6          2.0
 U.S. Exports to Mexico                    5.8            5.7          6.0         5.1          4.2
 U.S. LNG Exports                          3.7            3.3          4.4         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           44.1         42.4        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          2.1         2.1          2.1
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    80.8           80.0         78.4        77.6         72.0
 Total U.S. Demand                         92.7           91.5         90.8        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                   1.77           1.75                              
 Transco Z6 New York NG-CG-NY-SNL        1.78           1.74                              
 PG&E Citygate NG-CG-PGE-SNL             2.41           2.37                              
 Dominion South NG-PCN-APP-SNL           1.24           1.20                              
 Chicago Citygate NG-CG-CH-SNL           1.66           1.65                              
 Algonquin Citygate NG-CG-BS-SNL         1.72           1.51                              
 SoCal Citygate NG-SCL-CGT-SNL           1.68           1.67                              
 Waha Hub NG-WAH-WTX-SNL                 1.09           1.30                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             28.75          28.25                              
 PJM West EL-PK-PJMW-SNL                32.50          27.75                              
 Ercot North EL-PK-ERTN-SNL             26.50          42.50                              
 Mid C EL-PK-MIDC-SNL                   44.20          15.57                              
 Palo Verde EL-PK-PLVD-SNL              24.25          19.00                              
 SP-15 EL-PK-SP15-SNL                   25.25          22.75                              
 
 (Reporting by Scott DiSavino; Editing by Steve Orlofsky, Jonathan Oatis and Marguerita Choy)
  
 
 
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