Oct 17 (Reuters) - U.S. natural gas futures edged higher on Thursday as forecasts for colder weather and higher heating demand offset a big weekly storage build that boosted inventories to above normal levels for the first time in over two years.
The U.S. Energy Information Administration (EIA) said utilities added a bigger-than-usual 104 billion cubic feet (bcf) of gas to storage during the week ended Oct. 11.
That was close to the 106-bcf build analysts forecast in a Reuters poll and 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.
The increase boosted stockpiles to 3.519 trillion cubic feet (tcf), topping the five-year average for this time of year 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
Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange rose 1.5 cents, or 0.7%, to settle at $2.318 per million British thermal units.
Gas futures for the winter of 2020-2021 gained the most of any contracts on Thursday after Kinder Morgan Inc (NYSE:KMI) KMI.N delayed the projected in-service date for its $2 billion Permian Highway gas pipe in Texas to early 2021. price swings in gas futures pushed at-the-money implied volatility NGATMIV , a determinant of option premiums, to 50.5% on Wednesday, 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 six to 10 days, the U.S. National Weather Service (NWS) forecast temperatures in the Lower 48 U.S. states would be colder than usual in the central part of the country and warmer than normal on the East and West Coasts. That cold will spread into the East Coast 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 rise to 86.3 billion cubic feet per day (bcfd) next week as cooler weather blankets much of the country, up from its previous forecast of 84.6 bcfd on Wednesday.
That compares with an average of 86.4 bcfd for this week.
Gas flows to liquefied natural gas (LNG) export plants was expected to rise to a record high 7.2 bcfd on Thursday with an increase in flows to Cheniere Energy Inc's LNG.A Corpus Christi terminal in Texas, up from 6.4 bcfd on Wednesday. That compares with an average of 6.3 bcfd last week. flows to Mexico rose to 5.5 bcfd on Wednesday from a one-month low of 5.0 bcfd on Tuesday, according to Refinitiv data. That compares with an average of 5.5 bcfd last week and an all-time daily high of 5.9 bcfd on Sept. 18.
Gas production in the Lower 48 states rose to 93.6 bcfd on Wednesday from 93.3 bcfd on Tuesday, 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
(Actual)
(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
159 U.S. GFS CDDs
29 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
100.2
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
21.75
20.25
PJM West EL-PK-PJMW-SNL
30.25
29.75
Ercot North EL-PK-ERTN-SNL
17.25
20.50
Mid C EL-PK-MIDC-SNL
36.75
38.00
Palo Verde EL-PK-PLVD-SNL
43.25
56.50
SP-15 EL-PK-SP15-SNL
39.75
52.50