Gas futures hit technical resistance after strong price advance
LNG export flows near record highs
Seasonally cold weather forecast boosts heating demand
Lower 48 states see decline in gas output
Gas storage levels about 4% above normal, easing supply concerns
Adds latest prices, analyst quote
By Scott DiSavino
Oct 22 (Reuters) - U.S. natural gas futures eased on Wednesday as the contract hit technical resistance after soaring about 18% over the past few days.
Front-month gas futures for November delivery NGc1 on the New York Mercantile Exchange fell 2.4 cents, or 0.7%, to settle at $3.450 per million British thermal units (mmBtu). On Tuesday the contract closed at its highest level since October 7.
"Nearby gas futures are falling slightly following a test of resistance at this month’s $3.58 high that appears to be prompting some profit taking following this week’s strong ... advance," analysts at energy advisory firm Ritterbusch and Associates said in a note.
Prices soared earlier this week on forecasts for more demand over the next two weeks than previously expected, a drop in output so far this month and near-record flows of gas to liquefied natural gas $(LNG)$ export plants.
In the tropics, the U.S. National Hurricane Center projected Tropical Storm Melissa would strengthen into a hurricane on Saturday as it slowly heads northwest across the Caribbean Sea toward Jamaica. The system is not expected to reach the U.S. mainland during that time.
Even though storms can boost U.S. gas prices by cutting output along the U.S. Gulf Coast, they are more likely to reduce prices by shutting LNG export plants and knocking out power to homes and businesses. About 40% of the power generated in the U.S. comes from gas-fired plants.
SUPPLY AND DEMAND
LSEG said average gas output in the Lower 48 states fell to 106.6 billion cubic feet per day so far in October, down from 107.4 bcfd in September and a record monthly high of 108.0 bcfd in August.
Record output earlier this year allowed energy companies to inject more gas into storage than usual. There is currently about 4% more gas in storage than normal for this time of year. EIA/GAS NGAS/POLL
Meteorologists forecast temperatures across the country would remain mostly near-normal through November 6.
With the weather turning seasonally colder, LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 101.1 bcfd this week to 105.9 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday.
The average amount of gas flowing to the eight big U.S. LNG export plants rose to 16.5 bcfd so far in October, up from 15.7 bcfd in September and a monthly record high of 16.0 bcfd in April.
The United States became the world's biggest LNG producer 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 $11 per mmBtu at both the Dutch Title Transfer Facility TRNLTTFMc1 benchmark in Europe and the Japan Korea Marker JKMc1 benchmark in Asia. NG/EU
Week ended Oct 17 Forecast | Week ended Oct 10 Actual | Year ago Oct 17 | Five-year average Oct 17 | ||
U.S. weekly natgas storage change (bcf): | +81 | +80 | +79 | +77 | |
U.S. total natgas in storage (bcf): | 3,802 | 3,721 | 3,774 | 3,644 | |
U.S. total storage versus 5-year average | +4.3% | +4.3% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
Henry Hub NGc1 | 3.49 | 3.47 | 2.58 | 2.41 | 3.52 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 10.87 | 10.96 | 12.89 | 10.95 | 15.47 |
Japan Korea Marker (JKM) JKMc1 | 11.22 | 11.05 | 13.35 | 11.89 | 15.23 |
LSEG Heating (HDD), Cooling (CDD) 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 | 189 | 168 | 105 | 174 | 187 |
U.S. GFS CDDs | 27 | 31 | 52 | 32 | 24 |
U.S. GFS TDDs | 216 | 199 | 157 | 206 | 211 |
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 | 106.7 | 106.4 | 106.7 | 101.9 | 98.1 |
U.S. Imports from Canada | 7.3 | 7.4 | 7.0 | N/A | 7.4 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 114.0 | 113.8 | 113.7 | N/A | 105.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 2.2 | 2.2 | 2.2 | N/A | 2.2 |
U.S. Exports to Mexico | 6.5 | 6.7 | 6.7 | N/A | 6.1 |
U.S. LNG Export Feedgas | 16.8 | 16.9 | 17.1 | 13.1 | 11.3 |
U.S. Commercial | 5.9 | 6.7 | 8.4 | 6.4 | 6.9 |
U.S. Residential | 6.2 | 7.7 | 11.0 | 7.0 | 7.1 |
U.S. Power Plant | 33.0 | 30.8 | 29.7 | 34.1 | 31.7 |
U.S. Industrial | 22.2 | 22.7 | 23.2 | 22.3 | 22.4 |
U.S. Plant Fuel | 5.3 | 5.3 | 5.3 | 5.3 | 5.2 |
U.S. Pipe Distribution | 2.0 | 2.0 | 2.1 | 2.0 | 2.8 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
Total U.S. Consumption | 74.7 | 75.3 | 79.9 | 77.2 | 76.3 |
Total U.S. Demand | 100.2 | 101.1 | 105.9 | N/A | 95.9 |
N/A is Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30) | 2026 Current Day % of Normal Forecast | 2026 Prior Day % of Normal Forecast | 2025 % of Normal Actual | 2024 % of Normal Actual | 2023 % of Normal Actual |
Apr-Sep | 96 | 97 | 76 | 74 | 83 |
Jan-Jul | 90 | 93 | 78 | 76 | 77 |
Oct-Sep | 89 | 90 | 80 | 77 | 76 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Oct 24 | Week ended Oct 17 | 2024 | 2023 | 2022 | |
Wind | 17 | 11 | 11 | 10 | 11 |
Solar | 7 | 7 | 5 | 4 | 3 |
Hydro | 4 | 5 | 6 | 6 | 6 |
Other | 1 | 1 | 1 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
38 | 41 | 42 | 41 | 38 | |
Coal | 14 | 17 | 16 | 17 | 21 |
Nuclear | 18 | 18 | 19 | 19 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
Henry Hub NG-W-HH-SNL | 3.28 | 2.99 | 2.19 | 2.19 | 3.49 |
Transco Z6 New York NG-CG-NY-SNL | 2.67 | 2.23 | 1.64 | 1.98 | 3.29 |
PG&E Citygate NG-CG-PGE-SNL | 3.50 | 3.58 | 3.72 | 3.04 | 5.47 |
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 2.36 | 2.01 | 1.53 | 1.68 | 2.77 |
Chicago Citygate NG-CG-CH-SNL | 3.17 | 2.89 | 2.01 | 2.00 | 3.41 |
Algonquin Citygate NG-CG-BS-SNL | 2.79 | 2.40 | 1.80 | 2.88 | 4.27 |
SoCal Citygate NG-SCL-CGT-SNL | 3.05 | 3.25 | 2.60 | 2.47 | 5.92 |
Waha Hub NG-WAH-WTX-SNL | 2.07 | 0.91 | 0.59 | 0.77 | 2.91 |
AECO NG-ASH-ALB-SNL | 1.27 | 1.34 | 0.77 | 0.96 | 2.28 |
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
New England E-NEPLMHP-IDX | 52.03 | 46.38 | 40.14 | 47.35 | 48.44 |
PJM West E-PJWHRTP-IX | 52.83 | 51.58 | 41.96 | 41.98 | 45.33 |
Mid C W-MIDCP-IDX | 47.40 | 54.43 | 55.48 | 63.89 | 61.73 |
Palo Verde W-PVP-IDX | 30.18 | 27.33 | 45.83 | 39.50 | 62.42 |
SP-15 W-SP15-IDX | 24.55 | 33.05 | 35.86 | 31.30 | 58.87 |
(Reporting by Scott DiSavino in New York; Editing by Kirsten Donovan and Leslie Adler)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net/))