March 17, 2020 / 1:37 PM / 23 days ago

U.S. natgas futures little changed on mixed weather forecasts

    March 17 (Reuters) - U.S. natural gas futures traded within a few cents of unchanged on Tuesday as
forecasts for cooler weather and more heating demand this week offset an outlook calling for milder
weather and less heating demand next week than previously expected.
    Front-month gas futures for April delivery on the New York Mercantile Exchange remained
unchanged at $1.816 per million British thermal units (mmBtu) at 9:08 a.m. EDT (1308 GMT).
    Implied volatility for the front-month, meanwhile, soared 80% since late February as gas futures
jumped up and down over the past week after oil prices plunged as Saudi Arabia and Russia
failed to agree on new production cuts and instead decided to boost output even though the coronavirus
was slowing economic growth and global demand for energy.
    Even before the coronavirus started to spread, gas prices were already trading near their lowest in
four years. That's because near-record production and mild weather enabled utilities to leave more gas in
storage, making fuel shortages and price spikes unlikely this winter.
    Gas futures were trading about 37% below the eight-month high of $2.905 per mmBtu hit in early
November.
    With cooler weather expected, data provider Refinitiv projected gas demand in the U.S. Lower 48
states, including exports, would rise from an average of 104.7 billion cubic feet per day (bcfd) this
week to 106.8 bcfd next week. That compares with Refinitiv's forecasts on Monday of 103.2 bcfd for this
week and 108.7 bcfd for next week.
    The amount of gas flowing to U.S. liquefied natural gas (LNG) export plants was on track to rise to
8.6 bcfd on Tuesday from 8.5 bcfd on Monday due mostly to increases at Cheniere Energy Inc's
Sabine Pass export terminal in Louisiana, according to Refinitiv. That increase in overall LNG flows came
despite a decline at Cheniere's Corpus Christi plant in Texas and compares with an average of 8.0 bcfd
last week and an all-time daily high of 9.5 bcfd on Jan. 31.
    Analysts said flows to Sabine declined over the weekend in part because fog reduced the number of
vessels that could enter and exit the port. Cheniere said it does not comment on operations.
    Gas production in the Lower 48 states held at 94.5 bcfd for a third day in a row on Monday, according
to Refinitiv. That compares with an average of 93.9 bcfd last week and an all-time daily high of 96.6
bcfd on Nov. 30. 
    Analysts said they expect gas production to decline over the next year as the collapse in crude
prices prompts energy firms to slash spending on new oil drilling. Much of the growth in gas output in
recent years has come from gas associated with oil production in shale basins like the Permian in West
Texas.
                 
                                        Week ended     Week ended    Year ago    Five-year   
                                         March 13       March 6      March 13     average    
                                        (Forecast)      (Actual)                 March 13    
 U.S. natgas storage (bcf):                -12            -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                             261            278          263          250          258
 U.S. GFS CDDs                              21             21           7           17            13
 U.S. GFS TDDs                             282            299          370          267          271
                                                                                             
 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           94.3         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          101.2        101.5        97.5          85.6
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    3.0            2.8          2.9          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            8.4          8.9          5.4          1.8
 U.S. Commercial                           10.9           11.3         12.0        12.4          12.3
 U.S. Residential                          16.2           16.9         18.4        19.2          19.4
 U.S. Power Plant                          27.9           29.4         28.2        26.1          23.7
 U.S. Industrial                           23.1           23.2         23.6        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          2.4          2.3          2.5
 U.S. Vehicle Fuel                         0.1            0.1          0.1          0.1          0.1
 Total U.S. Consumption                    85.0           88.0         89.5        88.4          85.3
 Total U.S. Demand                        101.6          104.7        106.8        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           1.94                               
 Transco Z6 New York NG-CG-NY-SNL        1.46           1.67                               
 PG&E Citygate NG-CG-PGE-SNL             2.81           2.75                               
 Dominion South NG-PCN-APP-SNL           1.40           1.54                               
 Chicago Citygate NG-CG-CH-SNL           1.70           1.74                               
 Algonquin Citygate NG-CG-BS-SNL         1.66           1.78                               
 SoCal Citygate NG-SCL-CGT-SNL           2.61           2.35                               
 Waha Hub NG-WAH-WTX-SNL                 0.79           0.56                               
                                                                                             
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                        
 Hub                                   Current Day     Prior Day                             
 New England EL-PK-NPMS-SNL             21.25          17.75                               
 PJM West EL-PK-PJMW-SNL                26.00          25.78                               
 Ercot North EL-PK-ERTN-SNL             30.00          35.00                               
 Mid C EL-PK-MIDC-SNL                   34.75          38.50                               
 Palo Verde EL-PK-PLVD-SNL              30.25          39.00                               
 SP-15 EL-PK-SP15-SNL                   31.50          39.75                               
 
 (Reporting by Scott DiSavino; Editing by Bernadette Baum)
  
 
 
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