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U.S. natgas futures ease on forecasts for less cold weather next week

Published 2019-11-13, 08:31 a/m
Updated 2019-11-13, 08:57 a/m
© Reuters.  U.S. natgas futures ease on forecasts for less cold weather next week

© Reuters. U.S. natgas futures ease on forecasts for less cold weather next week

Nov 13 (Reuters) - U.S. natural gas futures eased to a two-week low on Wednesday on forecasts for less cold weather and lower heating demand next week than this week.

That decline comes even though the outlook through late November is colder than previously expected.

Front-month gas futures NGc1 for December delivery on the New York Mercantile Exchange were down 2.5 cents, or 1.0%, to $2.596 per million British thermal units at 8:19 a.m. EST (1319 GMT). If the contract closes at its current level, it would be its lowest settle since Oct. 28.

The U.S. National Weather Service (NWS) forecast temperatures in the Lower 48 U.S. states would shift from colder-than-normal now to near-normal to warmer-than-normal over much of the country during the next 6-14 days.

The cold weather still blanketing the eastern half of the country, meanwhile, has boosted spot prices in the Northeast to their highest since last winter with next-day gas for Wednesday in New York City NG-CG-NY-SNL at its highest since January, power at the PJM West hub EL-PK-PJMW-SNL in the Mid Atlantic at its highest since February and gas NG-CG-BS-SNL and power EL-PK-NPMS-SNL in New England at its highest since March.

Data provider Refinitiv projected average gas demand in the Lower 48 states, including exports, would fall to 112.8 billion cubic feet per day (bcfd) next week from 117.1 bcfd this week.

Those demand forecasts, however, were higher than Refinitiv's predictions on Tuesday of 109.7 bcfd for next week and 116.2 bcfd for this week.

Gas flows to liquefied natural gas (LNG) export plants rose to 7.2 bcfd on Tuesday from 7.0 bcfd on Monday, according to Refinitiv data. That compares with an average of 7.1 bcfd last week and an all-time daily high of 7.7 bcfd on Nov. 2.

Pipeline flows to Mexico rose to 5.6 bcfd on Tuesday from 5.3 bcfd on Monday, according to Refinitiv data. That compares with an average of 5.4 bcfd last week and an all-time daily high of 6.2 bcfd on Sept. 18.

Analysts said utilities likely added just 8 billion cubic feet (bcf) of gas to storage during the week ended Nov. 8. That compares with an injection of 42 bcf during the same week last year and a five-year (2014-18) average build of 30 bcf for the period. EIA/GAS

If correct, the increase would boost stockpiles to 3.737 trillion cubic feet (tcf), cutting the current surplus over the five-year average of 3.730 tcf to just 0.2% for this time of year.

Earlier this year, the amount of gas in inventory was as much as 33% below the five-year average in March. But record production allowed utilities to inject 2.569 tcf of gas into storage since April 1, turning the deficit into a surplus during the week ended Oct. 11. That was the second biggest amount of gas added during the April-October storage injection season, following 2014's record 2.727 tcf increase, according to federal data.

Gas production in the Lower 48 rose to 94.6 bcfd on Tuesday from 94.3 bcfd on Monday, according to Refinitiv data. That compares with an average of 94.7 bcfd last week and an all-time daily high of 95.2 bcfd on Nov. 2.

Week ended Week ended Year ago Five-year

Nov. 8

average

8(Forecast) 1(Actual)

Nov. 8

U.S. natgas storage (bcf):

Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days

Two-Week Total Forecast

Current Day Prior Day

Prior

10-Year

30-Year

Norm U.S. GFS HDDs

295 U.S. GFS CDDs

9 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

76.3 U.S. Imports from Canada

7.9 U.S. LNG Imports

0.2 Total U.S. Supply

102.1

102.7

102.6

U.S. Demand (bcfd) U.S. Exports to Canada

2.4 U.S. Exports to Mexico

3.7 U.S. LNG Exports

1.5 U.S. Commercial

10.9 U.S. Residential

16.0 U.S. Power Plant

22.5 U.S. Industrial

22.8 U.S. Plant Fuel

4.7 U.S. Pipe Distribution

2.1 U.S. Vehicle Fuel

0.1 Total U.S. Consumption

101.5

79.1 Total U.S. Demand

102.0

117.1

112.8

111.8

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

Current Day Prior Day

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 Day Prior Day

New England EL-PK-NPMS-SNL

60.00

33.50

PJM West EL-PK-PJMW-SNL

56.07

33.75

Ercot North EL-PK-ERTN-SNL

51.00

31.00

Mid C EL-PK-MIDC-SNL

34.69

38.50

Palo Verde EL-PK-PLVD-SNL

41.25

44.00

SP-15 EL-PK-SP15-SNL

43.50

39.25

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