Oct 16 (Reuters) - U.S. natural gas futures edged up on Wednesday on forecasts for more cold weather and higher heating demand in late October and November.
That price rise came despite forecasts for warmer weather and lower heating use next week than previously expected and the return of inventories to normal levels for the first time in over two years.
Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange were up 2 cents, or 0.9%, to $2.359 per million British thermal units at 8:27 a.m. EDT (1227 GMT). On Tuesday, the contract closed at its highest since Oct. 4.
Recent price swings in gas futures pushed at-the-money implied volatility NGATMIV , a determinant of option premiums, to 50.4% on Friday, its highest since January. Over the past year, implied volatility has swung wildly, hitting a record high of 117.5% in November and a record low of 18.6% in April.
Over the next 6-10 days, the U.S. National Weather Service (NWS) forecast temperatures in the Lower 48 U.S. states would be warmer than usual east of the Mississippi River and cooler than normal over the Rocky Mountains. That cold is expected to shift to the eastern half of the country over the 8-14 day period, with warmer temperatures moving into the Southwest, the NWS said.
Refinitiv projected average gas demand in the Lower 48 states, including exports, would only reach 84.6 billion cubic feet per day (bcfd) next week as moderate weather reduces heating use, down from its previous forecast of 85.1 bcfd on Tuesday.
That compares with an average of 86.0 bcfd during this week's cooler weather.
Gas flows to liquefied natural gas (LNG) export plants eased to 6.6 bcfd on Tuesday due to a decline at Cheniere Energy Inc's LNG.A Corpus Christi terminal in Texas, down from a record 7.0 bcfd on Monday after Dominion Energy Inc's D.N Cove Point terminal in Maryland returned to service. That compares with an average of 6.3 bcfd last week. the Gemmata LNG vessel left Kinder Morgan (NYSE:KMI) Inc's KMI.N Elba Island LNG export facility in Georgia and is heading to Trinidad. The vessel arrived nearly full of LNG (94% of maximum draft) from Trinidad, its prior stop, and left with less LNG (81% of maximum draft), according to data from Refinitiv.
The first liquefaction train at Elba terminal entered service on Oct. 4. It is common for LNG export facilities to receive LNG to cool their storage tanks and other equipment at startup. In addition, there is also an LNG import plant at Elba. at Kinder Morgan were only able to say the vessel was docked at the facility. Officials at Royal Dutch Shell Plc RDSa.L , which controls the movement of gas into and out of the export facility, would not comment on what Gemmata was doing.
Pipeline flows to Mexico slipped to 5.1 bcfd on Tuesday from 5.3 bcfd on Monday, according to Refinitiv data. That compares with an average of 5.5 last week and an all-time daily high of 5.9 bcfd on Sept. 18.
Analysts forecast utilities added 103 billion cubic feet (bcf) of gas to storage during the week ended Oct. 11. That compares with an injection of 82 bcf during the same week last year and a five-year (2014-18) average build of 81 bcf for the period.
If correct, the increase would boost stockpiles to 3.518 trillion cubic feet (tcf), topping the five-year average of 3.505 tcf for the first time since September 2017.
The amount of gas in inventory was as much as 33% below the five-year average in March 2019. But with production close to a record high, analysts said stockpiles should end the summer injection season at near normal levels of around 3.7 tcf on Oct. 31. NGAS/POLL
Gas production in the Lower 48 states eased to 93.3 bcfd on Tuesday from 93.7 bcfd on Monday, according to Refinitiv data. That compares with an average of 93.0 bcfd last week and an all-time daily high of 93.8 bcfd on Sept. 29.
Week ended Week ended Year ago Five-year
Oct 11
Oct 4
Oct 11
average
(Forecast) (Actual)
Oct 11
U.S. natgas storage (bcf):
Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast
Current
Prior Day
Prior
10-Year
30-Year
Norm U.S. GFS HDDs
155 U.S. GFS CDDs
30 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
75.5 U.S. Imports from Canada
7.6 U.S. LNG Imports
0.2 Total U.S. Supply
100.0
100.1
U.S. Demand (bcfd) U.S. Exports to Canada
2.4 U.S. Exports to Mexico
3.7 U.S. LNG Exports
1.2 U.S. Commercial
6.6 U.S. Residential
6.8 U.S. Power Plant
25.2 U.S. Industrial
20.5 U.S. Plant Fuel
4.6 U.S. Pipe Distribution
1.9 U.S. Vehicle Fuel
0.1 Total U.S. Consumption
65.7 Total U.S. Demand
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Current
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
Prior Day
New England EL-PK-NPMS-SNL
20.25
21.50
PJM West EL-PK-PJMW-SNL
29.75
16.25
Ercot North EL-PK-ERTN-SNL
20.50
18.00
Mid C EL-PK-MIDC-SNL
38.00
37.00
Palo Verde EL-PK-PLVD-SNL
56.50
40.25
SP-15 EL-PK-SP15-SNL
52.50
40.00