March 18, 2020 / 4:31 PM / 19 days ago

UPDATE 2-U.S. natgas tumbles to 24-year low as coronavirus cuts global demand outlook

 (Adds closing prices, quote)
    March 18 (Reuters) - U.S. natural gas futures plunged 7% to their lowest since 1995 on Wednesday,
alongside a 24% collapse in oil prices, as travel bans sparked by the coronavirus slashed the global
outlook for energy demand.
    "The natural gas market's capitulation has reached a new stage with today's final spiral ... to its
lowest mark in decades," Daniel Myers, market analyst at Gelber & Associates in Houston, said in a
report. "Today's settlement will be an important sign to determine if the market has found rock bottom or
if it will search for an even lower foundation."
    In addition to the oil price meltdown, analysts said expectations for a very small storage withdrawal
last week and forecasts for milder weather and lower heating demand over the next two weeks also
contributed to the gas price drop.
    Front-month gas futures for April delivery on the New York Mercantile Exchange fell 12.5
cents, or 7.2%, to settle at $1.604 per million British thermal units (mmBtu), its lowest since September
1995. The all-time low for gas futures was $1.04 in January 1992.
    Oil prices plunged, with U.S. crude futures hitting an 18-year low, as governments worldwide
accelerated lockdowns to counter the coronavirus pandemic that is causing global fuel demand to collapse.

    Analysts noted most gas speculators were better prepared for the current price collapse than oil
speculators since their bets on gas futures and options have been net short since May 2019 - reaching a
record speculative net short position of 309,492 contracts in mid February.
    Oil speculators, meanwhile, were net long and have always been net long, according to Refinitiv data
going back to 2009.
    Even before the coronavirus started to spread around the world, gas prices were already trading near
their lowest in years as near-record production and months of mild weather enabled utilities to leave
more gas in storage, making fuel shortages and price spikes unlikely this winter.
    Gas futures were down about 45% below the eight-month high of $2.905 per mmBtu hit in early November.
    Refinitiv projected gas demand in the U.S. Lower 48 states, including exports, would rise from an
average of 104.4 billion cubic feet per day (bcfd) this week to 105.3 bcfd next week. That is lower than
Refinitiv's forecasts on Tuesday of 104.7 bcfd for this week and 106.8 bcfd for next week due to milder
weather forecasts than earlier expected.
    The amount of gas flowing to U.S. liquefied natural gas (LNG) export plants was on track to rise to
8.3 bcfd on Wednesday from 8.0 bcfd on Tuesday, according to Refinitiv. That compares with an average of
8.0 bcfd last week and an all-time daily high of 9.5 bcfd on Jan. 31.
                 
                                        Week ended     Week ended    Year ago    Five-year   
                                         March 13       March 6      March 13     average    
                                        (Forecast)      (Actual)                 March 13    
 U.S. natgas storage (bcf):                 -6            -48          -91          -63      
                                                                                             
                                                                                             
 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                             237            261          263          250          254
 U.S. GFS CDDs                              25             21           7           17            13
 U.S. GFS TDDs                             262            282          370          267          267
                                                                                             
 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              93.7           94.2         94.3        88.9          76.9
 U.S. Imports from Canada                  6.6            6.9          7.2          8.6          8.5
 U.S. LNG Imports                          0.1            0.0          0.0          0.0          0.2
 Total U.S. Supply                        100.5          101.1        101.4        97.5          85.6
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    3.0            2.8          2.8          2.8          2.6
 U.S. Exports to Mexico                    5.6            5.6          5.6          4.8          3.8
 U.S. LNG Exports                          8.0            8.1          8.5          5.4          1.8
 U.S. Commercial                           10.9           11.1         11.5        12.4          12.3
 U.S. Residential                          16.2           16.7         17.5        19.2          19.4
 U.S. Power Plant                          27.9           29.7         28.6        26.1          23.7
 U.S. Industrial                           23.1           23.2         23.5        23.6          22.6
 U.S. Plant Fuel                           4.6            4.7          4.7          4.7          4.7
 U.S. Pipe Distribution                    2.3            2.3          2.3          2.3          2.5
 U.S. Vehicle Fuel                         0.1            0.1          0.1          0.1          0.1
 Total U.S. Consumption                    85.0           87.9         88.3        88.4          85.3
 Total U.S. Demand                        101.6          104.4        105.3        101.4         93.5
                                                                                             
                                                                                             
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                          
 Hub                                   Current Day     Prior Day                             
 Henry Hub NG-W-HH-SNL                   1.89           1.89                               
 Transco Z6 New York NG-CG-NY-SNL        1.46           1.46                               
 PG&E Citygate NG-CG-PGE-SNL             2.84           2.81                               
 Dominion South NG-PCN-APP-SNL           1.38           1.40                               
 Chicago Citygate NG-CG-CH-SNL           1.65           1.70                               
 Algonquin Citygate NG-CG-BS-SNL         1.60           1.66                               
 SoCal Citygate NG-SCL-CGT-SNL           2.50           2.61                               
 Waha Hub NG-WAH-WTX-SNL                 0.83           0.79                               
                                                                                             
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                        
 Hub                                   Current Day     Prior Day                             
 New England EL-PK-NPMS-SNL             18.25          21.25                               
 PJM West EL-PK-PJMW-SNL                24.75          26.00                               
 Ercot North EL-PK-ERTN-SNL             26.25          30.00                               
 Mid C EL-PK-MIDC-SNL                   35.50          34.75                               
 Palo Verde EL-PK-PLVD-SNL              33.00          30.25                               
 SP-15 EL-PK-SP15-SNL                   31.50          31.50                               
 
 (Reporting by Scott DiSavino and Jessica Resnick-Ault; editing by Diane Craft and Richard Chang)
  
 
 
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