Nov 8 (Reuters) - U.S. natural gas futures rose on Friday on forecasts the cold weather currently blanketing much of the country would boost heating demand enough to erase the small storage surplus over the next week or two.
That higher price move came despite forecasts the weather will moderate in late November after next week's brutal freeze.
Analysts said likely utilities 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 surplus to just 0.2% above the five-year average of 3.730 tcf 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 to storage during the April-October injection season, following 2014's record 2.727 tcf increase, according to federal data.
Front-month gas futures NGc1 for December delivery on the New York Mercantile Exchange were up 4.1 cents, or 1.5%, to $2.813 per million British thermal units at 8:22 a.m. EST (1322 GMT). If the contract were to close at its current level, it would be within a nickel of its $2.862 settle on Tuesday, which was its highest close since March 19.
For the week, the front-month was up about 3%, putting it on track to rise for a second week in a row after futures surged 18% last week.
The U.S. National Weather Service (NWS) forecast temperatures in the Lower 48 U.S. states would remain much colder than normal across the eastern two-thirds of the country over the next six to 10 days before moderating during the eight to 14 day period.
With cold weather still blanketing much of the country, next-day gas for Friday rose to its highest since March in Chicago NG-CG-CH-SNL , the Henry Hub NG-W-HH-SNL benchmark in Louisiana and the Algonquin hub NG-CG-BS-SNL in New England.
With more cold expected next week, data provider Refinitiv projected average gas demand in the Lower 48, including exports, would rise from 101.7 billion cubic feet per day (bcfd) this week to 116.2 bcfd next week before sliding to 109.4 bcfd in two weeks as the weather moderates.
That compares with Refinitiv's forecasts on Thursday of 101.1 bcfd for this week and 116.1 bcfd for next week.
Gas flows to liquefied natural gas (LNG) export plants rose to 7.1 bcfd on Thursday from 6.7 bcfd on Wednesday, according to Refinitiv data. That is still down from last week's average of 7.4 bcfd due mostly to a decline at Cheniere Energy Inc's LNG.A Corpus Christi plant in Texas and compares with an all-time daily high of 7.7 bcfd on Nov. 2.
Pipeline flows to Mexico held at 5.5 bcfd for a third day in a row on Thursday, according to Refinitiv data. That compares with an average of 5.3 bcfd last week and an all-time daily high of 6.2 bcfd on Sept. 18.
Gas production in the Lower 48 rose to 94.1 bcfd on Thursday from 93.7 bcfd on Wednesday, according to Refinitiv data. That compares with an average of 94.4 bcfd last week and an all-time daily high of 95.0 bcfd on Oct. 28.
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
267 U.S. GFS CDDs
11 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
100.8
101.8
101.8
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
100.4
79.1 Total U.S. Demand
101.7
116.2
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
42.50
37.50
PJM West EL-PK-PJMW-SNL
39.21
34.05
Ercot North EL-PK-ERTN-SNL
39.25
21.75
Mid C EL-PK-MIDC-SNL
55.00
42.75
Palo Verde EL-PK-PLVD-SNL
54.25
44.25
SP-15 EL-PK-SP15-SNL
55.75
48.50