Oct 14 (Reuters) - U.S. natural gas futures on Monday rose from a six-week low last week as an increase in liquefied natural gas (LNG) exports was expected to boost demand this week.
That price move came despite forecasts for lower than previously expected demand next week due to a projected moderation in the weather.
Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange (NYMEX) were up 7 cents, or 3.2%, to $2.284 per million British thermal units (mmBtu) at 9:50 a.m. EDT (1350 GMT). On Friday, the contract closed at its lowest since Aug. 27.
Speculators last week cut their long positions on the NYMEX 3023651MLNG to their lowest since January 2009 as stockpiles returned to near normal levels for the first time in two years.
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
Recent price swings in gas futures pushed at-the-money implied volatility NGATMIV , a determinant of option premiums, to 48.3% on Friday, its highest level 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.
Refinitiv projected gas demand in the lower 48 U.S. states, including exports, would reach 86.5 billion cubic feet per day (bcfd) this week due to higher LNG exports, up from its previous forecast on Friday of 86.0 bcfd.
Next week, however, Refinitiv forecast demand would only reach 85.9 bcfd, down from its previous projection of 86.5 bcfd on Friday as warmer weather lowers expected heating demand.
Gas flows to LNG export plants jumped to a preliminary record 7.0 bcfd on Monday with the return of Dominion Energy Inc's D.N Cove Point terminal in Maryland, up from an average of 6.3 bcfd last week and the prior all-time daily high of 6.7 bcfd on Saturday. traders noted the Gemmata LNG vessel docked at Kinder Morgan (NYSE:KMI) Inc's KMI.N Elba Island LNG export facility in Georgia. The vessel was full of LNG from Trinidad, according to data from Refinitiv. The first liquefaction train at the Elba export terminal entered service on Oct. 4. flows to Mexico fell to 5.1 bcfd on Sunday from 5.4 bcfd on Saturday, 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.
Gas production in the lower 48 states held at 93.4 bcfd on Sunday, the same as Saturday, 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.
In the spot market, next-day power for Monday at the PJM West Hub EL-PK-PJMW-SNL in western Pennsylvania fell to a record low of $16.25 per megawatt hour, according to data from Refinitiv going back to 2010.
Week ended Week ended Year ago Five-year
Oct 11
Oct 4
Oct 11
average
(Forecast) (Actual)
Oct 11
U.S. natgas storage (bcf):
Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast
Current
Prior Day
Prior
10-Year
30-Year
Norm U.S. GFS HDDs
147 U.S. GFS CDDs
33 U.S. GFS TDDs
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week
Current
Next Week This week Five-Yea
last year
Average
Month U.S. Supply (bcfd)
U.S. Lower 48 Dry Production
75.5 U.S. Imports from Canada
7.6 U.S. LNG Imports
0.2 Total U.S. Supply
100.0
100.0
U.S. Demand (bcfd) U.S. Exports to Canada
2.4 U.S. Exports to Mexico
3.7 U.S. LNG Exports
1.2 U.S. Commercial
6.6 U.S. Residential
6.8 U.S. Power Plant
25.2 U.S. Industrial
20.5 U.S. Plant Fuel
4.6 U.S. Pipe Distribution
1.9 U.S. Vehicle Fuel
0.1 Total U.S. Consumption
65.7 Total U.S. Demand
SNL U.S. Natural Gas Next-Day Prices ($ 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
21.50
26.75
PJM West EL-PK-PJMW-SNL
16.25
23.00
Ercot North EL-PK-ERTN-SNL
18.00
17.00
Mid C EL-PK-MIDC-SNL
37.00
34.25
Palo Verde EL-PK-PLVD-SNL
40.25
32.25
SP-15 EL-PK-SP15-SNL
40.00
35.25