July 23, 2020 / 2:50 PM / 15 days ago

UPDATE 4-U.S. natgas jumps over 6% as heat keeps air conditioners cranked up

 (Adds closing prices)
    July 23 (Reuters) - U.S. natural gas futures jumped over 6% on Thursday, with a couple of storms
brewing in the Gulf of Mexico and on forecasts for high air conditioning demand during a heat wave
expected to blanket much of the country through at least early August. 
    Prices rose despite a federal report showing an expected near-normal storage build.
    The U.S. Energy Information Administration (EIA) said U.S. utilities injected a near-normal 37
billion cubic feet (bcf) of gas into storage in the week ended July 17.
    Front-month gas futures rose 10.4 cents, or 6.2%, to settle at $1.785 per million British
thermal units, their highest close since July 10.
    Tropical Depression 8 is expected to strengthen into a Tropical Storm in the Gulf of Mexico over the
next day or two as it moves toward the Texas coast.
    Refinitiv said production in the Lower 48 U.S. states averaged 88.4 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.
    With the weather expected to remain hot, Refinitiv projected U.S. demand, including exports, will
hold around 92.7 bcfd this week and next. The outlook for next week was a little lower than Refinitiv's
forecast on Wednesday.
    "Gas has been the fuel of choice for power generators looking to meet peak demand this month, and
this fuel switching has helped absorb excess gas left by (coronavirus demand) destruction in the LNG and
industrial sectors," said Daniel Myers, market analyst at Gelber & Associates in Houston.
    Pipeline gas flowing to U.S. LNG export plants has averaged 3.4 bcfd (35% utilization) in July, down
from a 20-month low of 4.1 bcfd in June and a record 8.7 bcfd in February. 
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jul 17         Jul 10       Jul 17     average    
                                         (Actual)       (Actual)                  Jul 17    
 U.S. natgas storage (bcf):                +37            +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                             236            238          220         206          201
 U.S. GFS TDDs                             237            239          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            6.8          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           95.6         95.7        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            5.8          5.6         5.1          4.2
 U.S. LNG Exports                          3.4            3.8          4.0         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         44.6        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            2.2          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         80.5        76.4         72.0
 Total U.S. Demand                         90.8           92.7         92.6        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                   1.69           1.66                              
 Transco Z6 New York NG-CG-NY-SNL        1.75           1.75                              
 PG&E Citygate NG-CG-PGE-SNL             2.39           2.39                              
 Dominion South NG-PCN-APP-SNL           1.23           1.24                              
 Chicago Citygate NG-CG-CH-SNL           1.59           1.62                              
 Algonquin Citygate NG-CG-BS-SNL         1.57           1.55                              
 SoCal Citygate NG-SCL-CGT-SNL           1.74           1.89                              
 Waha Hub NG-WAH-WTX-SNL                 1.19           1.37                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             28.50          24.50                              
 PJM West EL-PK-PJMW-SNL                30.50          28.75                              
 Ercot North EL-PK-ERTN-SNL             31.00          24.00                              
 Mid C EL-PK-MIDC-SNL                   14.14          18.25                              
 Palo Verde EL-PK-PLVD-SNL              23.25          24.25                              
 SP-15 EL-PK-SP15-SNL                   23.75          24.75                              
 
 (Reporting by Scott DiSavino; Editing by Bernadette Baum, David Gregorio and Richard Chang)
  
 
 
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