Adds latest prices
Speculators cut net longs for first time in 3 weeks
Cash prices below futures every day since April
Gas stockpiles 6% over normal levels and rising
By Scott DiSavino
July 8 (Reuters) - U.S. natural gas futures slid about 2% to a one-week low on Tuesday on low cash prices, an increase in output so far this month and higher-than-normal amounts of gas in storage.
That price decline occurred despite a drop in gas output in recent days and forecasts for the weather to remain hotter than normal through late July, which should lead power generators to keep burning large amounts of gas to meet demand for air conditioning.
Front-month gas futures for August delivery NGc1 on the New York Mercantile Exchange (NYMEX) fell 7.2 cents, or 2.1%, to settle at $3.34 per million British thermal units (mmBtu), their lowest close since June 26 for a second day in a row.
With gas futures down about 9% last week, speculators cut their net long futures and options positions on the New York Mercantile and Intercontinental exchanges for the first time in three weeks to their lowest levels since mid-June, the U.S. Commodity Futures Trading Commission's Commitments of Traders report showed.
One factor weighing on futures prices over the past few months has been low cash prices. Next-day gas at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana traded around $3.24 per mmBtu. Spot contracts have been below front-month futures every day since late April.
Analysts 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.
Another factor weighing on futures prices in recent months has been the growing surplus of gas in storage over the five-year normal level for this time of year. Analysts projected energy firms added more gas into storage than usual for an 11th time in 12 weeks during the week ended July 4. EIA/GAS NGAS/POLL
Gas stockpiles were already about 6% above normal levels for this time of year.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 106.8 billion cubic feet per day (bcfd) so far in July, up from a monthly record high of 106.4 bcfd in June.
On a daily basis, however, output was on track to drop by around 2.8 bcfd over the past five days to a preliminary four-week low of 104.7 bcfd on Tuesday. Analysts have noted that preliminary data is often revised later in the day.
Meteorologists forecast weather across the Lower 48 states will remain mostly warmer than normal through at least July 23.
With hotter weather expected, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 105.9 bcfd this week to 107.7 bcfd next week. Those forecasts were similar to LSEG's outlook on Monday.
The average amount of gas flowing to the eight big U.S. LNG export plants rose to 15.5 bcfd so far in July as liquefaction units at some plants slowly exit maintenance reductions and unexpected outages. That was up from 14.3 bcfd in June and 15.0 bcfd in May, but remained below the monthly record high of 16.0 bcfd in April.
The U.S. became the world's biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.
Gas was trading around $12 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and $13 at the Japan Korea Marker (JKM) JKMc1 benchmark in Asia. NG/EU
Week ended Jul 4 Forecast | Week ended Jun 27 Actual | Year ago Jul 4 | Five-year average Jul 4 | ||
U.S. weekly natgas storage change (bcf): | +58 | +55 | +61 | +53 | |
U.S. total natgas in storage (bcf): | 3,011 | 2,953 | 3,190 | 2,833 | |
U.S. total storage versus 5-year average | +6.3% | +6.2% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
Henry Hub NGc1 | 3.44 | 3.41 | 2.21 | 2.41 | 3.52 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 11.84 | 11.70 | 10.32 | 10.95 | 15.47 |
Japan Korea Marker (JKM) JKMc1 | 13.10 | 13.16 | 12.32 | 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 | 3 | 3 | 2 | 3 | 4 |
U.S. GFS CDDs | 244 | 243 | 238 | 211 | 199 |
U.S. GFS TDDs | 247 | 246 | 240 | 214 | 203 |
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 | 107.5 | 106.7 | 106.5 | 103.2 | 97.8 |
U.S. Imports from Canada | 8.2 | 8.2 | 7.9 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 115.7 | 114.9 | 114.3 | N/A | 105.7 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.9 | 2.1 | 2.1 | N/A | 2.3 |
U.S. Exports to Mexico | 7.1 | 6.6 | 6.5 | N/A | 6.4 |
U.S. LNG Export Feedgas | 14.9 | 15.1 | 15.1 | 11.5 | 10.0 |
U.S. Commercial | 4.4 | 4.3 | 4.4 | 4.3 | 4.7 |
U.S. Residential | 3.6 | 3.6 | 3.5 | 3.5 | 3.5 |
U.S. Power Plant | 44.9 | 44.4 | 46.2 | 50.2 | 48.1 |
U.S. Industrial | 22.2 | 22.2 | 22.2 | 21.8 | 21.7 |
U.S. Plant Fuel | 5.3 | 5.3 | 5.3 | 5.2 | 5.4 |
U.S. Pipe Distribution | 2.2 | 2.2 | 2.2 | 2.2 | 3.3 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
Total U.S. Consumption | 82.8 | 82.1 | 84.0 | 87.3 | 86.9 |
Total U.S. Demand | 106.7 | 105.9 | 107.7 | N/A | 99.2 |
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 | 76 | 76 | 74 | 83 | 107 |
Jan-Jul | 78 | 78 | 76 | 77 | 102 |
Oct-Sep | 79 | 79 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jul 11 | Week ended Jul 4 | 2024 | 2023 | 2022 | |
Wind | 6 | 8 | 11 | 10 | 11 |
Solar | 7 | 7 | 5 | 4 | 3 |
Hydro | 5 | 5 | 6 | 6 | 6 |
Other | 1 | 1 | 1 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
42 | 43 | 42 | 41 | 38 | |
Coal | 20 | 19 | 16 | 17 | 21 |
Nuclear | 18 | 17 | 19 | 19 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 3.24 | 3.24 | |||
Transco Z6 New York NG-CG-NY-SNL | 3.09 | 2.85 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.53 | 3.08 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 2.72 | 2.68 | |||
Chicago Citygate NG-CG-CH-SNL | 3.00 | 2.94 | |||
Algonquin Citygate NG-CG-BS-SNL | 3.78 | 3.17 | |||
SoCal Citygate NG-SCL-CGT-SNL | 4.25 | 3.61 | |||
Waha Hub NG-WAH-WTX-SNL | 1.97 | 2.16 | |||
AECO NG-ASH-ALB-SNL | 0.80 | 0.93 | |||
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England E-NEPLMHP-IDX | 109.89 | 107.13 | |||
PJM West E-PJWHDAP-IDX | 76.89 | 80.39 | |||
Mid C W-MIDCP-IDX | 76.64 | 73.95 | |||
Palo Verde W-PVP-IDX | 67.76 | 61.33 | |||
SP-15 W-SP15-IDX | 49.99 | 42.81 |
text_section_type="notes" 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 terminalFor graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.htmlFor next-day SNL U.S. gas prices, see: 0#SNL-NGFor next-day SNL U.S. power prices, see: 0#SNL-PWRFor U.S. natgas price and storage polls, see: NGAS/POLLFor U.S. nuclear power outages, see: NUKE/For U.S. Northwest hydro power report, see: NWRFCFor U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44For the U.S. natural gas speed guide, see: USGASFor the U.S. power speed guide, see: USPOWERTo 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#3CFTC023651NYMEX Henry Hub futures only 0#1CFTC023651ICE Henry Hub options and futures combined 0#3CFTC023391NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565BNYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C
(Reporting by Scott DiSavino; Editing by Paul Simao)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net/))