July 30, 2020 / 12:42 PM / in 15 days

U.S. natgas futures ease ahead of storage report as weather moderates

    July 30 (Reuters) - U.S. natural gas futures eased on Thursday on expectations power generators will
burn less gas next week as cooling demand drops as the weather turns milder.
    That price decline came ahead of a report expected to show a smaller-than-usual storage build last
week, when consumers were still cranking up their air conditioners to escape a heat wave that has
blanketed much of the country since late June.
    Analysts said U.S. utilities injected 26 billion cubic feet (bcf) of gas into storage in the week
ended July 24. That compares with an increase of 56 bcf during the same week last year and a five-year
(2015-19) average build of 33 bcf.
    If correct, the increase would bring stockpiles to 3.241 trillion cubic feet (tcf), 15.3% above the
five-year average of 2.812 tcf for this time of year. By the end of the injection season in October,
analysts expect U.S. inventories will reach a record high over 4.1 tcf.           
    On its first day as the front-month, gas futures for the most active September contract fell
2.4 cents, or 1.2%, to $1.906 per million British thermal units at 8:22 a.m. EDT (1222 GMT).
    Even though the September contract is down from where it traded on Wednesday, it is up 2%
from where the August contract closed. That puts the front-month on track for its highest close since
May 6.
    The premium of the October contract over September NGU20-V20, meanwhile, rose to its highest on
record as the market expects energy demand to rise as the economy rebounds later this year as
governments lift coronavirus lockdowns.
    With the weather expected to moderate, Refinitiv projected U.S. demand, including exports, will drop
from 92.3 billion cubic feet per day (bcfd) this week to 89.3 bcfd next week.
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jul 24         Jul 17       Jul 24     average    
                                        (Forecast)      (Actual)                  Jul 24    
 U.S. natgas storage (bcf):                +26            +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            3
 U.S. GFS CDDs                             216            216          219         204          197
 U.S. GFS TDDs                             217            217          220         207          200
                                                                                            
 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              89.1           89.0         88.9        91.4         78.1
 U.S. Imports from Canada                  6.8            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                         95.9           95.8         95.9        98.4         86.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.4            2.3          2.3         2.6          2.0
 U.S. Exports to Mexico                    5.8            5.7          5.6         5.1          4.2
 U.S. LNG Exports                          3.7            3.2          4.1         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           45.0         41.3        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            2.2          2.1         2.1          2.1
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    80.8           81.0         77.3        77.6         72.0
 Total U.S. Demand                         92.7           92.3         89.3        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           1.83                              
 Transco Z6 New York NG-CG-NY-SNL        1.80           1.89                              
 PG&E Citygate NG-CG-PGE-SNL             2.58           2.58                              
 Dominion South NG-PCN-APP-SNL           1.31           1.31                              
 Chicago Citygate NG-CG-CH-SNL           1.78           1.74                              
 Algonquin Citygate NG-CG-BS-SNL         1.70           1.75                              
 SoCal Citygate NG-SCL-CGT-SNL           2.59           2.57                              
 Waha Hub NG-WAH-WTX-SNL                 1.30           1.23                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             35.75          34.75                              
 PJM West EL-PK-PJMW-SNL                35.50          35.25                              
 Ercot North EL-PK-ERTN-SNL             28.00          22.25                              
 Mid C EL-PK-MIDC-SNL                   35.29          39.67                              
 Palo Verde EL-PK-PLVD-SNL              75.00          53.25                              
 SP-15 EL-PK-SP15-SNL                   63.75          48.75                              
    

 (Reporting by Scott DiSavino; Editing by Steve Orlofsky)
  
 
 
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