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Energy

U.S. natgas on track to hit highest price since November as hurricane shuts output

    Oct 6 (Reuters) - U.S. natural gas futures were on track to hit their highest since November on
Tuesday as liquefied natural gas (LNG) exports keep rising and producers shut Gulf of Mexico wells
ahead of Hurricane Delta.
    That move higher came despite forecasts for milder weather and lower domestic demand over the next
two weeks than previously expected.
    Delta is expected to strengthen into a major hurricane before slamming into the Gulf Coast between
Louisiana and Florida on Friday.
    Front-month gas futures were up 2.5 cents, or 1.0%, at $2.640 per million British thermal
units at 8:49 a.m EDT (1249 GMT), putting the contract on track for its highest close since November.
On Monday, the front-month closed at its highest since Aug. 31.
    Data provider Refinitiv said output in the Lower 48 U.S. states was on track to drop to 84.2
billion cubic feet per day (bcfd) on Tuesday, its lowest since August 2018 as producers shut wells for
Hurricane Delta. That data is preliminary and subject to change later in the day.
    For the month, output has averaged 86.4 bcfd so far in October, down from a four-month low of 87.2
bcfd in September.
    Those declines come as low prices earlier in the year due to coronavirus demand destruction caused
producers to shut wells and cut back on new drilling so much that output from new wells no longer
offsets existing well declines.
    With milder weather coming, Refinitiv projected demand, including exports, would slip from 86.0
bcfd this week to 85.8 bcfd next week. That was lower than Refinitiv's forecasts on Monday.
    The amount of gas flowing to LNG export plants has averaged 7.0 bcfd so far in October, up from 5.7
bcfd in September, as vessels started returning to Cameron in Louisiana. Traders noted Cove Point in
Maryland was expected to exit a maintenance outage next week.
    
                                       Week ended     Week ended    Year ago   Five-year   
                                         Oct 2         Sep 25        Oct 2      average    
                                       (Forecast)      (Actual)                  Oct 2     
 U.S. natgas storage (bcf):                +77           +76          +102        +86 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                             97             92           75          73          120
 U.S. GFS CDDs                             55             56           99          72           43
 U.S. GFS TDDs                             152           148          174         145          163
                                                                                           
 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             86.6           86.5         86.7        94.2         80.1
 U.S. Imports from Canada                  5.9           6.6          6.4         7.3          7.6
 U.S. LNG Imports                          0.0           0.0          0.0         0.0          0.2
 Total U.S. Supply                        92.6           93.1         93.1       101.5         87.9
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.1           2.2          2.2         2.2          1.9
 U.S. Exports to Mexico                    6.0           5.7          5.9         5.9          4.5
 U.S. LNG Exports                          6.4           7.2          7.9         6.1          2.3
 U.S. Commercial                           5.3           6.0          6.0         5.8          6.7
 U.S. Residential                          4.9           6.3          6.5         5.8          7.0
 U.S. Power Plant                         30.6           30.3         29.2        31.1         26.8
 U.S. Industrial                          21.8           22.1         21.8        21.5         21.0
 U.S. Plant Fuel                           4.3           4.3          4.3         4.2          4.3
 U.S. Pipe Distribution                    1.8           1.9          1.9         1.9          1.8
 U.S. Vehicle Fuel                         0.1           0.1          0.1         0.1          0.1
 Total U.S. Consumption                   68.9           70.9         69.8        70.4         67.7
 Total U.S. Demand                        83.4           86.0         85.8        84.6         76.4 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                        
 Hub                                   Current Day    Prior Day                            
 Henry Hub NG-W-HH-SNL                  1.92           1.41                              
 Transco Z6 New York NG-CG-NY-SNL       1.10           0.83                              
 PG&E Citygate NG-CG-PGE-SNL            3.93           3.55                              
 Dominion South NG-PCN-APP-SNL          0.99           0.84                              
 Chicago Citygate NG-CG-CH-SNL          1.47           1.06                              
 Algonquin Citygate NG-CG-BS-SNL        1.31           0.91                              
 SoCal Citygate NG-SCL-CGT-SNL          4.06           2.27                              
 Waha Hub NG-WAH-WTX-SNL                0.17           0.03 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                      
 Hub                                   Current Day    Prior Day                            
 New England EL-PK-NPMS-SNL             23.75         18.25                              
 PJM West EL-PK-PJMW-SNL                19.75         15.50                              
 Ercot North EL-PK-ERTN-SNL             23.50         15.75                              
 Mid C EL-PK-MIDC-SNL                   37.64         25.25                              
 Palo Verde EL-PK-PLVD-SNL              41.50         35.81                              
 SP-15 EL-PK-SP15-SNL                   47.75         37.50                              
 
 (Reporting by Scott DiSavino
Editing by Paul Simao)
  
 
 
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