US natgas prices drop 4% to 1-week low on rising output, lower flows to LNG plants

Reuters
06-10
UPDATE 1-US natgas prices drop 4% to 1-week low on rising output, lower flows to LNG plants

Speculators boost net longs last week to highest since April

Spot gas prices drop to six-month low

Storage injections seen at 100+ bcf for record tying 7th week in a row

Adds latest prices

By Scott DiSavino

June 9 (Reuters) - U.S. natural gas futures fell about 4% to a one-week low on Monday on an increase in output in recent days and a drop in the amount of gas flowing to liquefied natural gas export plants due to ongoing spring maintenance at several facilities.

Gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 14.9 cents, or 3.9%, to settle at $3.635 per million British thermal units, their lowest close since May 30.

Fast-growing volumes of gas in storage have also helped keep futures prices in check in recent weeks.

Gas stockpiles are about 5% above normal for this time of year and analysts forecast energy firms made a record-tying, seventh triple-digit injection during the week ended June 6. 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.

Another factor keeping pressure on futures prices over the past month or so has been low cash prices.

Next-day gas prices at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana were trading around $2.68 per mmBtu, a six-month low, 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 has held at 105.2 billion cubic feet per day so far in June, the same as in May. That is down from a monthly record high of 106.3 bcfd in March due primarily to normal spring maintenance. Output so far this month is higher than LSEG projected on Friday when the average was just 104.8 bcfd in June.

Energy firms usually work on gas pipes and other equipment in the spring and autumn when demand for the fuel for heating and cooling is low.

Meteorologists project weather across the Lower 48 states will remain mostly warmer than normal through June 24.

LSEG forecast average gas demand in the Lower 48, including exports, would rise from 98.6 bcfd this week to 100.7 bcfd next week. The forecast for this week was higher than LSEG's outlook on Friday.

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 in Louisiana and 3.9-bcfd Corpus Christi 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.

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

3.71

3.78

2.81

2.41

3.52

Title Transfer Facility (TTF) TRNLTTFMc1

11.96

12.11

10.87

10.95

15.47

Japan Korea Marker (JKM) JKMc1

12.46

12.42

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

9

11

12

15

U.S. GFS CDDs

182

172

189

160

148

U.S. GFS TDDs

191

181

200

172

163

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

105.6

105.5

100.9

96.8

U.S. Imports from Canada

7.5

7.9

7.2

N/A

7.3

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.0

Total U.S. Supply

112.4

113.5

112.7

N/A

104.1

U.S. Demand (bcfd)

U.S. Exports to Canada

1.7

1.7

1.7

N/A

2.3

U.S. Exports to Mexico

7.4

7.2

7.3

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

3.7

3.9

4.3

U.S. Power Plant

34.5

38.4

39.8

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

2.1

1.9

2.8

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.2

Total U.S. Consumption

72.9

76.1

77.5

75.3

76.8

Total U.S. Demand

95.5

98.6

100.7

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

80

76

77

102

Oct-Sep

81

82

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

19

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

2.68

2.86

Transco Z6 New York NG-CG-NY-SNL

1.52

1.88

PG&E Citygate NG-CG-PGE-SNL

3.20

3.17

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

1.50

1.76

Chicago Citygate NG-CG-CH-SNL

2.49

2.71

Algonquin Citygate NG-CG-BS-SNL

2.25

2.73

SoCal Citygate NG-SCL-CGT-SNL

3.45

3.49

Waha Hub NG-WAH-WTX-SNL

0.87

1.68

AECO NG-ASH-ALB-SNL

0.75

0.91

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

Hub

Current Day

Prior Day

New England E-NEPLMHP-IDX

41.17

41.17

PJM West E-PJWHDAP-IDX

36.16

46.09

Mid C W-MIDCP-IDX

85.45

44.49

Palo Verde W-PVP-IDX

50.57

39.46

SP-15 W-SP15-IDX

31.29

22.82

(Reporting by Scott DiSavinoEditing by Mark Potter and Nia Williams)

((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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