US natgas prices edge up on rising demand, signs of higher flows to Cameron LNG

Reuters
06-11
US natgas prices edge up on rising demand, signs of higher flows to Cameron LNG

Cameron LNG showing signs of exiting maintenance reduction

Gas storage on track for 7th triple digit injection

Gas storage injections hit monthly record high in May

By Scott DiSavino

June 11 (Reuters) - U.S. natural gas futures edged up about 1% on Wednesday on forecasts for more demand this week than previously expected with an expected increase in flows to liquefied natural gas $(LNG)$ export plants as Cameron LNG's plant in Louisiana shows signs of exiting a maintenance reduction.

Gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 3.5 cents, or 1.0%, to $3.568 per million British thermal units. On Tuesday, the contract closed at its lowest since May 30 for a second day in a row.

Prices edged up even as energy firms continue to add record amounts of gas into storage and as the cost of spot gas remains well below futures prices.

So far this year, energy firms have pulled a monthly record high of 1.013 billion cubic feet (bcf) of gas out of storage during a brutally cold January and added a monthly record high of 497 bcf into storage in May when mild weather kept both heating and cooling demand low, according to federal energy data. The prior all-time monthly injection high was 494 bcf in May 2015.

Analysts expect energy firms will keep setting storage records in coming weeks with a record-tying, seventh triple-digit injection forecast for the week ended June 6. The U.S. Energy Information Administration will release the storage report for the week ended June 6 on Thursday. EIA/GAS GAS/POLL

The last time energy firms added 100 bcf or more of gas into storage for seven weeks in a row was in June 2014, according to federal energy data going back to 2010.

Next-day gas prices at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana were trading around $2.79 per mmBtu, keeping spot contracts below front-month futures every day since late April.

Analysts have said that so long as spot prices remain far enough below front-month futures NGc1 to cover margin and storage costs, traders should be able to lock in arbitrage profits by buying spot gas, storing it and selling a futures contract.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states eased to 105.0 billion cubic feet per day so far in June, down from 105.2 bcfd in May and a monthly record high of 106.3 bcfd in March due primarily to normal spring maintenance.

Meteorologists project weather across the Lower 48 states will remain mostly warmer than normal through June 26.

LSEG forecast average gas demand in the Lower 48, including exports, would rise from 98.6 bcfd this week to 100.0 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday, while the forecast for next week was lower.

The average amount of gas flowing to the eight big U.S. LNG export plants fell to 13.8 bcfd so far in June, down from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.

Traders said LNG feedgas reductions since April were primarily due to spring maintenance, including work at Cameron LNG's 2.0-bcfd plant in Louisiana and Cheniere Energy's LNG.N 4.5-bcfd Sabine Pass facility in Louisiana and 3.9-bcfd Corpus Christi plant in Texas, and short, unplanned unit outages at Freeport LNG's 2.1-bcfd plant in Texas on May 6, May 23, May 28 and June 3.

Energy traders have noted that LNG maintenance would likely continue through mid-June at Cameron and late-June at Sabine. Gas flows to Cameron were on track to edge up to a four-week high of 1.5 bcfd on Wednesday, up from an average of 1.4 bcfd over the past month, according to LSEG data.

Week ended Jun 6 Forecast

Week ended May 30 Actual

Year ago Jun 6

Five-year average

Jun 6

U.S. weekly natgas storage change (bcf):

+105

+122

+77

+87

U.S. total natgas in storage (bcf):

2,703

2,598

2,963

2,568

U.S. total storage versus 5-year average

+5.3%

+4.7%

Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2024

Five-Year Average (2019-2023)

Henry Hub NGc1

3.58

3.53

2.81

2.41

3.52

Title Transfer Facility (TTF) TRNLTTFMc1

11.80

11.64

10.87

10.95

15.47

Japan Korea Marker (JKM) JKMc1

12.41

12.44

12.30

11.89

15.23

LSEG Heating $(HDD.UK)$, Cooling $(CDD.AU)$ and Total (TDD) Degree Days

Two-Week Total Forecast

Current Day

Prior Day

Prior Year

10-Year Norm

30-Year Norm

U.S. GFS HDDs

9

8

11

12

13

U.S. GFS CDDs

186

190

189

160

152

U.S. GFS TDDs

195

198

200

172

16

LSEG U.S. Weekly GFS Supply and Demand Forecasts

Prior Week

Current Week

Next Week

This Week Last Year

Five-Year (2020-2024)Average For Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production

104.9

105.2

105.2

100.9

96.8

U.S. Imports from Canada

7.5

8.0

7.3

N/A

7.3

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.0

Total U.S. Supply

112.4

113.2

112.5

N/A

104.1

U.S. Demand (bcfd)

U.S. Exports to Canada

1.7

1.6

1.7

N/A

2.3

U.S. Exports to Mexico

7.4

7.4

7.4

N/A

6.3

U.S. LNG Exports

13.5

13.6

14.2

12.9

9.1

U.S. Commercial

4.7

4.5

4.4

4.5

4.8

U.S. Residential

4.1

3.8

3.8

3.9

4.3

U.S. Power Plant

34.5

38.2

38.9

38.1

38.0

U.S. Industrial

22.3

22.1

22.2

21.6

21.5

U.S. Plant Fuel

5.2

5.2

5.2

5.2

5.2

U.S. Pipe Distribution

1.9

2.0

2.0

1.9

2.8

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.2

Total U.S. Consumption

72.9

76.0

76.7

75.3

76.8

Total U.S. Demand

95.5

98.6

100.0

N/A

88.2

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)

2025 Current Day

% of Normal Forecast

2025

Prior Day % of Normal Forecast

2024

% of Normal Actual

2023

% of Normal Actual

2022

% of Normal Actual

Apr-Sep

79

79

74

83

107

Jan-Jul

79

79

76

77

102

Oct-Sep

81

81

77

76

103

U.S. weekly power generation percent by fuel - EIA

Week ended Jun 13

Week ended Jun 6

2024

2023

2022

Wind

9

9

11

10

11

Solar

8

8

5

4

3

Hydro

7

7

6

6

6

Other

1

1

1

2

2

Petroleum

0

0

0

0

0

Natural Gas

40

40

42

41

38

Coal

16

16

16

17

21

Nuclear

18

19

19

19

19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

Hub

Current Day

Prior Day

Henry Hub NG-W-HH-SNL

2.79

3.13

Transco Z6 New York NG-CG-NY-SNL

2.09

1.81

PG&E Citygate NG-CG-PGE-SNL

3.36

3.35

Eastern Gas (old Dominion South) NG-PCN-APP-SNL

1.83

1.70

Chicago Citygate NG-CG-CH-SNL

2.57

2.59

Algonquin Citygate NG-CG-BS-SNL

2.00

2.06

SoCal Citygate NG-SCL-CGT-SNL

3.43

3.60

Waha Hub NG-WAH-WTX-SNL

1.78

1.80

AECO NG-ASH-ALB-SNL

0.83

0.96

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)

Hub

Current Day

Prior Day

New England E-NEPLMHP-IDX

33.10

35.18

PJM West E-PJWHDAP-IDX

46.58

38.87

Mid C W-MIDCP-IDX

37.96

61.87

Palo Verde W-PVP-IDX

40.77

51.17

SP-15 W-SP15-IDX

23.54

32.21

(Reporting by Scott DiSavino; Editing by Andrea Ricci)

((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))

For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.

For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminal

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For next-day SNL U.S. gas prices, see: 0#SNL-NG

For next-day SNL U.S. power prices, see: 0#SNL-PWR

For U.S. natgas price and storage polls, see: NGAS/POLL

For U.S. nuclear power outages, see: NUKE/

For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S. natural gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C

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