May 19, 2020 / 3:11 PM / 18 days ago

UPDATE 3-U.S. natgas futures rise near 3% as output slows

 (Adds latest prices)
    May 19 (Reuters) - U.S. natural gas futures rose almost 3% on Tuesday on a continued slowdown in
output as energy firms shut oil and gas wells and slash spending on new drilling after crude prices sank
earlier this year due to the sharp demand decline caused by the coronavirus pandemic.
    That price increase came despite expectation that the pandemic will keep domestic energy use and
exports low for months.
    Front-month gas futures for June delivery on the New York Mercantile Exchange rose 4.7 cents,
or 2.6%, to settle at $1.830 per million British thermal units, their highest since May 7.
    Looking forward, analysts expect that prices will rise as governments lift travel restrictions with
futures for the balance of 2020 and calendar 2021 trading about 25% and 50% over the
front-month, respectively.
    Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell to 89.9 billion
cubic feet per day (bcfd) so far in May, down from an eight-month low of 92.9 bcfd in April and an
all-time monthly high of 95.4 bcfd in November.
    EQT Corp, the biggest U.S. natural gas producer, said on Tuesday it started to reduce output
in Pennsylvania and Ohio on May 16 as demand destruction from the coronavirus cut current prices for the
fuel.
    Energy consultant Rystad Energy said the pandemic would cause U.S. gas production to fall every
month through November, when it is expected to reach 82.5 bcfd.
    Refinitiv projected that demand in the Lower 48 states, including exports, would hold at around 78.2
bcfd this week and next, which is lower than its 79.8-bcfd forecast for next week on Monday.
    U.S. LNG exports averaged 6.7 bcfd so far in May, Refinitiv said, down from a four-month low of 8.1
bcfd in April and an all-time high of 8.7 bcfd in February.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          May 15        May 8         May 15     average    
                                        (Forecast)      (Actual)                  May 15    
 U.S. natgas storage (bcf):                +94            +103         +101        +87      
                                                                                            
                                                                                            
 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                              26             24           44          47           46
 U.S. GFS CDDs                             119            122          107          99           94
 U.S. GFS TDDs                             145            146          151         146          140
                                                                                            
 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              90.1           88.8         89.1        88.5         77.0
 U.S. Imports from Canada                  5.8            6.0          6.1         7.8          7.8
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         95.9           94.8         95.2        95.3         84.9
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.1            2.1          2.1         2.6          1.9
 U.S. Exports to Mexico                    4.6            4.6          4.6         4.3          3.9
 U.S. LNG Exports                          6.6            5.9          5.7         5.6          2.0
 U.S. Commercial                           7.9            5.4          4.7         5.5          5.5
 U.S. Residential                          10.2           5.6          4.1         5.9          6.1
 U.S. Power Plant                          25.1           26.7         29.3        26.8         25.3
 U.S. Industrial                           22.6           21.6         21.4        21.8         20.6
 U.S. Plant Fuel                           4.5            4.4          4.4         4.3          4.5
 U.S. Pipe Distribution                    1.9            1.7          1.7         1.7          1.9
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    72.4           65.5         65.7        66.1         64.0
 Total U.S. Demand                         85.7           78.2         78.1        78.6         71.8
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                                  1.66                              
 Transco Z6 New York NG-CG-NY-SNL                       1.16                              
 PG&E Citygate NG-CG-PGE-SNL                            2.42                              
 Dominion South NG-PCN-APP-SNL                          1.17                              
 Chicago Citygate NG-CG-CH-SNL                          1.55                              
 Algonquin Citygate NG-CG-BS-SNL                        1.22                              
 SoCal Citygate NG-SCL-CGT-SNL                          1.71                              
 Waha Hub NG-WAH-WTX-SNL                                1.42                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL                            18.25                              
 PJM West EL-PK-PJMW-SNL                               20.25                              
 Ercot North EL-PK-ERTN-SNL                            24.90                              
 Mid C EL-PK-MIDC-SNL                                  13.63                              
 Palo Verde EL-PK-PLVD-SNL                             18.50                              
 SP-15 EL-PK-SP15-SNL                                  18.50                              
 
 (Reporting by Scott DiSavino
Editing by Nick Zieminski and Marguerita Choy)
  
 
 
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