Oct 2 (Reuters) - U.S. natural gas futures fell to a more than one-month low on Wednesday, on record high production and forecasts for moderate weather over the next two weeks.
Gas futures NGc1 for November delivery on the New York Mercantile Exchange settled down 3.6 cents, or 1.6%, at $2.247 per million British thermal units (mmBtu) after touching their lowest since Aug. 29, at $2.245. The front-month has fallen for a 12th straight session, its longest on record.
"It is not only the oversupply becoming an issue, the weather is not very hot and on top we are getting weak manufacturing numbers all over the globe so it is raising concerns about industrial demand if we are going to go into a global recession," said Phil Flynn, senior analyst at Price Futures Group in Chicago.
"In the process of manufacturing there is a lot of natural gas used. So, if all the factories slow down and you're not running these many factories, the demand for LNG and gas will go down and it will give us a little bit of an oversupply."
The U.S. manufacturing sector contracted in September to its weakest level in more than a decade, an industry report released on Tuesday showed. data showed gas output in the Lower 48 states fell to 92.5 billion cubic feet per day (bcfd) on Tuesday from 93.7 bcfd on Monday, but was near the all-time daily high of 93.8 bcfd posted on Sept. 29.
Analysts said utilities likely added 105 bcf of gas to storage during the week ended Sept. 27. That compares with an injection of 91 bcf during the same week last year and a five-year (2014-18) average build of 83 bcf for the period.
If estimates are on target, the increase last week would boost stockpiles to 3.310 trillion cubic feet (tcf), just 0.7% below the five-year average, but 16% above the same week a year ago.
"We feel that an injection of at least 100 bcf (in tomorrow's storage report) will be required to push this market much lower as it is now evolving into an oversold technical condition," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
The amount of gas in inventory has remained below the five-year average since September 2017. It fell as much as 33% below that in March 2019. But with production hitting record highs, analysts said stockpiles should reach a near-normal 3.7 tcf by the end of summer injection season on Oct. 31. NGAS/POLL
Data provider Refinitiv projected gas demand in the lower 48 U.S. states would fall to an average of 82.4 bcfd next week from an average around 85.5 bcfd forecast this week.
Those demand forecasts include exports, which analysts said would likely rise as more gas flows to LNG export plants and pipelines to Mexico.
Week ended
Year ago Five-year
Sept.
ended
Sept. 27
average
27(Forecas Sept. 20
Sept. 27
(Actual)
U.S. natgas storage (bcf):
Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast
Current
Prior
Prior
10-Year
30-Year
Norm U.S. GFS HDDs
102 U.S. GFS CDDs
52 U.S. GFS TDDs
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This week Five-Yea
last year
Average
Month U.S. Supply (bcfd)
U.S. Lower 48 Dry Production
75.2 U.S. Imports from Canada
7.7 U.S. LNG Imports
0.1 Total U.S. Supply
100.3
100.5
U.S. Demand (bcfd) U.S. Exports to Canada
2.2 U.S. Exports to Mexico
3.8 U.S. LNG Exports
1.1 U.S. Commercial
4.8 U.S. Residential
3.8 U.S. Power Plant
29.9 U.S. Industrial
20.2 U.S. Plant Fuel
4.6 U.S. Pipe Distribution
2.0 U.S. Vehicle Fuel
0.1 Total U.S. Consumption
65.4 Total U.S. Demand
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Current
Prior
Henry Hub NG-W-HH-SNL
Transco Z6 New York NG-CG-NY-SNL
PG&E Citygate NG-CG-PGE-SNL
Dominion South NG-PCN-APP-SNL
Chicago Citygate NG-CG-CH-SNL
Algonquin Citygate NG-CG-BS-SNL
SoCal Citygate NG-SCL-CGT-SNL
Waha Hub NG-WAH-WTX-SNL
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Current
Prior
New England EL-PK-NPMS-SNL
30.50
24.00
PJM West EL-PK-PJMW-SNL
81.00
41.00
Ercot North EL-PK-ERTN-SNL
150.00
29.33
Mid C EL-PK-MIDC-SNL
36.65
36.78
Palo Verde EL-PK-PLVD-SNL
26.00
29.00
SP-15 EL-PK-SP15-SNL
30.75
32.00