Sunday, May 22

US natgas futures rise supported by outlook for warmer weather


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US natural gas futures rose on Monday as the country transitioned from colder to

warmer temperatures which could increase cooling demand, while expectations of higher demand for US

liquefied natural gas also buoyed prices.

US front-month gas futures for June delivery rose 23.3 cents, or 3.2%, to $7.477 per million

British thermal units by 10:17 am EDT (1417 GMT). Prices earlier hit a two-week high.

“The fear for this market is we’re going to flip a switch and go from winter, which is heating degree days

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to cooling degree days overnight… Supplies are below average,” Phil Flynn, an analyst at Price Futures

Group.

Also, there are expectations that the US is going to continue to export record amounts of LNG further

lending support to prices, Flynn added.

According to data provider Refinitiv, temperatures over the next two weeks are estimated to be slightly

warmer than usual with 84 cooling degree days (CDDs) projected compared with a 30-year average of 64 CDDs for

the period.

CDDs, used to estimate demand to cool homes and businesses, measure the number of degrees a day’s average

temperature is above 65 degrees Fahrenheit (18 degrees Celsius).

US gas futures have gained about 99% so far this year as higher global prices kept demand for US LNG

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exports near record highs since Russia invaded Ukraine on Feb. 24. Gas was trading around $34 per mmBtu in

Europe and $24.53 in Asia.

The US gas market, however, remains mostly shielded from those much higher global prices because the

United States is the world’s top gas producer, with all the fuel it needs for domestic use while capacity

constraints inhibit exports of more LNG no matter how high global prices rise.

Refinitiv said average gas output in the US Lower 48 states rose to 94.5 billion cubic feet per day

(bcfd) in April from 93.7 bcfd in March. That compares with a monthly record of 96.3 bcfd in December 2021.

Week ended Week ended Year ago Five-year

Apr 29 Apr 22 Apr 29 average

(Forecast) (Actual) Apr 29

US weekly natgas storage change (bcf): +62 +40 +53 +78

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US total natgas in storage (bcf): 1,552 1,490 1,949 1,873

US total storage versus 5-year average -17.1% -17.0%

Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year

Last Year Average Average

2021 (2017-2021)

Henry Hub 7.25 6.86 2.96 3.73 2.89

Title Transfer Facility (TTF) 34.11 31.09 8.77 16.04 7.49

Japan Korea Marker (JKM) 24.53 24.82 9.65 18.00 8.95

Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days

Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year

Norm Norm

US GFS HDDs 74 85 97 87 86

US GFS CDDs 84 79 51 65 64

US GFS TDDs 158 164 148 152 150

Refinitiv US Weekly GFS Supply and Demand Forecasts

Prior Week Current Week Next Week This Week Five-Year

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Last Year Average For

Month

US Supply (bcfd)

US Lower 48 Dry Production 93.7 94.1 94.4 92.0 83.9

US Imports from Canada 8.8 8.6 8.7 7.4 7.6

US LNG Imports 0.0 0.0 0.0 0.0 0.0

Total US Supply 102.5 102.7 103.0 99.4 92.5

US Demand (bcfd)

US Exports to Canada 2.8 3.2 3.4 2.3

US Exports to Mexico 6.3 6.2 6.1 6.0

US LNG Exports 12.2 12.1 12.2 11.4

US Commercial 7.7 6.5 5.9 6.0

US Residential 10.0 7.7 6.4 6.7

US Power Plant 25.4 26.9 27.9 25.6

US Industrial 22.1 21.2 21.0 22.0

US Plant Fuel 4.6 4.6 4.7 4.6

US Pipe Distribution 1.9 1.8 1.8 1.9

US Vehicle Fuel 0.1 0.1 0.1 0.1

Total US Consumption 71.8 68.9 67.9 66.9

Total US Demand 93.2 90.4 89.6 86.6

US weekly power generation percent by fuel – EIA

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Week ended Week ended Week ended Week ended Week ended Week ended

May 6 Apr 29 Apr 22 Apr 15 Apr 8

Wind 17 16 16 17 15

Solar 4 4 4 4 4

Hydro 6 7 7 7 8

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 32 33 33 32 33

Coal 18 19 19 19 19

Nuclear 20 19 19 19 19

SNL US Natural Gas Next-Day Prices ($ per mmBtu)

Hub Current Day Prior Day

Henry Hub 6.84 6.97

Transco Z6 New York 6.00 6.00

PG&E Citygate 7.70 7.62

Dominion South 5.94 6.05

Chicago Citygate 6.66 6.58

Algonquin Citygate 6.53 6.44

SoCal Citygate 6.78 6.80

Waha Hub 6.45 6.30

AECO 6.93 5.67

SNL US Power Next-Day Prices ($ per megawatt-hour)

Hub Current Day

New England 58.75 64.75

PJM West 33.00 44.50

Ercot North 58.60 57.25

Mid C 75.67 93.00

Palo Verde 36.00 54.75

SP-15 36.75 58.50

(Reporting by Eileen Soreng in Bengaluru; Editing by Kirsten Donovan)

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