Nov 18 (Reuters) - U.S. natural gas futures fell almost 5% to a three-week low on Monday on forecasts for the weather to be warmer than previously expected over the next two weeks.
Front-month gas futures NGc1 for December delivery on the New York Mercantile Exchange (NYMEX) fell 12.2 cents, or 4.5%, to settle at $2.566 per million British thermal units, their lowest close since Oct. 28.
That was the second biggest daily decline since January after the contract fell by 5.5% on Nov. 11.
The decline kept the premium of futures for January over December NGZ19-F20 at its lowest level since February 2008 for a second session in a row.
Speculators last week cut their net short positions on the NYMEX and Intercontinental Exchange by 17,690 contracts to 69,145, according to Commodity Futures Trading Commission data. though the weather is expected to moderate, the U.S. National Weather Service continued to forecast temperatures across much of the Lower 48 U.S. states would remain a little cooler than normal over the next 6-14 days.
Data provider Refinitiv projected average gas demand in the Lower 48 states, including exports, would rise from 106.9 billion cubic feet per day (bcfd) this week to 110.0 bcfd next week due to a seasonal cooling.
Those demand forecasts, however, were down from Refinitiv's earlier predictions on Friday of 110.1 bcfd for this week and 112.4 bcfd for next week.
Gas flows to liquefied natural gas (LNG) export plants rose to 7.3 bcfd on Sunday from 7.1 bcfd on Saturday, according to Refinitiv data. That compares with an average of 7.0 bcfd last week and an all-time daily high of 7.7 bcfd on Nov. 2.
Pipeline flows to Mexico slipped to 5.2 bcfd on Sunday from 5.4 bcfd on Saturday, according to Refinitiv data. That compares with an average of 5.6 bcfd last week and an all-time daily high of 6.2 bcfd on Sept. 18.
Analysts said utilities likely pulled 79 billion cubic feet (bcf) of gas from storage during the week ended Nov. 15, their first withdrawal of the November-March heating season.
That reduction compares with a withdrawal of 109 bcf during the same week last year and a five-year (2014-18) average decline of 32 bcf for the period. EIA/GAS
If correct, the decrease would cut stockpiles to 3.653 trillion cubic feet (tcf), 1.2% below the five-year average of 3.698 tcf for this time of year, erasing the small storage surplus built up over the prior five weeks.
Earlier this year, in March, the amount of gas in inventory was as much as 33% below the five-year average. But record production has allowed utilities to inject 2.569 tcf into storage since April 1, turning that big deficit into a small surplus during the week ended Oct. 11.
So long as the weather moderates in late November as expected, analysts said stockpiles will likely return to a surplus over the next month or so as rising production enables utilities to leave gas in storage.
Gas production in the Lower 48 states held at 95.1 bcfd for a second day in a row on Sunday, 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. 3.
Week ended Week ended Year ago Five-year
Nov. 15
average
15(Forecast 8(Actual)
Nov. 15
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
324 U.S. GFS CDDs
7 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
102.8
103.0
103.0
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
100.9
79.1 Total U.S. Demand
116.3
106.9
110.0
104.5
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
34.25
30.50
PJM West EL-PK-PJMW-SNL
30.25
34.50
Ercot North EL-PK-ERTN-SNL
27.50
31.25
Mid C EL-PK-MIDC-SNL
24.00
23.50
Palo Verde EL-PK-PLVD-SNL
29.25
43.50
SP-15 EL-PK-SP15-SNL
33.25
39.50