Sept 27 (Reuters) - U.S. natural gas futures fell to a fresh three-week low on Friday on forecasts for the weather to moderate over the next two weeks, keeping both cooling and heating demand low and allowing the amount of gas in storage to rise to near normal levels for the winter.
Traders noted the decline in overall demand would come despite an expected increase in liquefied natural gas (LNG) and Mexican exports to record highs.
On its first day as the front-month, gas futures NGc1 for November delivery on the New York Mercantile Exchange fell 3.9 cents, or 1.6%, to settle at $2.404 per million British thermal units (mmBtu), their lowest close since Sept. 3.
That put the front-month down for a ninth day in a row for the first time since August 2009. The most losing sessions in a row was 10 in Aug. 2001.
Those days of declines swung the contract from technically overbought territory last week to oversold now with a relative strength index (RSI) below 30.
In addition, that front-month drop carried over to later-dated futures with calendar 2020 NGYstc1 falling enough to put calendar 2021 NGYstc2 back into a premium over 2020 for the first time since early September.
For the week, the contract was down about 5%, its biggest weekly loss since mid July.
Data provider Refinitiv projected gas demand in the lower 48 U.S. states would slide to an average of 83.3 billion cubic feet per day (bcfd) in two weeks as cooling demand declines faster than heating demand rises. That compares with an average of around 83.8 bcfd this week and next.
Those demand forecasts include exports, which analysts said would likely rise as more gas flows to LNG export plants and pipelines to Mexico.
Gas flows to LNG plants held around 6.3 bcfd on Thursday, up from a low of 5.7 bcfd last week following the shutdown of Dominion Energy Inc's D.N Cove Point in Maryland for planned maintenance, according to Refinitiv data. Point remains shut. The extra gas is flowing to other terminals like Freeport LNG's plant in Texas and Cheniere Energy Inc's LNG.A Sabine Pass in Louisiana.
Refinitiv projected flows to LNG terminals could rise to a record high of 7.1 bcfd in two weeks.
Exports to Mexico eased to 5.2 bcfd on Thursday, down from 5.4 bcfd on Wednesday. That compares with a record high of 5.9 bcfd last week after gas started moving through the 2.6-bcfd Valley Crossing pipeline from Texas. said pipeline flows to Mexico would likely top those record levels soon now that Kinder Morgan (NYSE:KMI) Inc's KMI.N Permian Express pipe in Texas entered service. said utilities likely added 100 billion cubic feet (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. EIA/GAS
If correct, that increase would boost stockpiles to 3.305 trillion cubic feet (tcf), 0.9% below the five-year average of 3.335 tcf for this time of year.
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 near a record high, analysts said stockpiles should reach a near-normal 3.7 tcf by the end of summer injection season on Oct. 31. NGAS/POLL
Gas production in the lower 48 states, meanwhile, rose to 92.6 bcfd on Thursday from 92.4 bcfd on Wednesday, according to Refinitiv data. That compares with an all-time daily high of 93.0 bcfd on Aug. 19.
Week ended
Year ago Five-year
ended
Sep 27
average
27(Forecas Sep 20
Sep 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
84 U.S. GFS CDDs
63 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
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
20.50
21.25
PJM West EL-PK-PJMW-SNL
30.25
32.48
Ercot North EL-PK-ERTN-SNL
37.50
170.00
Mid C EL-PK-MIDC-SNL
25.10
21.88
Palo Verde EL-PK-PLVD-SNL
22.50
26.50
SP-15 EL-PK-SP15-SNL
32.50
58.50