Tuesday, October 4

US natgas futures tease $10 on sturdy demand, Europe crisis


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US natural gas futures jumped by more than 5% on Monday to within touching distance

of the key $10 per mmBtu level, with gains driven by a strong demand outlook, record prices in Europe and

concerns over availability of the fuel.

Front-month gas futures rose 34 cents, or 3.6%, to $9.676 per million British thermal units (mmBtu)

by 9:50 am EDT (1350 GMT), after jumping nearly 7% to $9.982, a 14-year high, earlier in the session.

“This ($10) has been a long-awaited number,” Robert DiDona of Energy Ventures Analysis said.

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“We’ve had strong LNG demand and we’ve had a much warmer than normal summer, which has put continued

pressure on our storage estimates, which we expect to finish below the five year average, so that has

subsequently been resulting in a higher forward curve,” DiDona added.

Global gas prices remained elevated near $84 per mmBtu in Europe and $57 in Asia.

Russia will halt natural gas supplies to Europe for three days at the end of the month via its main

pipeline into the region, state energy giant Gazprom said on Friday, piling pressure on the region

as it seeks to refuel ahead of winter.

“The fact that the strong (price) gains are developing amidst a little assistance from the weather factor

suggests a strong underpinning in which record high European prices and major concerns over supply

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availability during the coming winter are keeping speculative shorts on the defensive,” analysts at energy

consulting firm Ritterbusch and Associates said in a note.

The average amount of gas flowing to US LNG export plants held at 10.9 bcfd so far in August, the same

as July. That compares with a monthly record of 12.9 bcfd in March. The seven big US export plants can turn

about 13.8 bcfd of gas into LNG.

Week ended Week ended Year ago Five-year

Aug 19 Aug 12 Aug 19 average

(Forecast) (Actual) Aug 19

US weekly natgas storage change (bcf): +59 +18 +32 +46

US total natgas in storage (bcf): 2,578 2,519 2,847 2,932

US total storage versus 5-year average -12.1% -12.7%

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

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Last Year Average Average

2021 (2017-2021)

Henry Hub 9.17 8.99 4.03 3.73 2.89

Title Transfer Facility (TTF) 83.82 72.46 15.43 16.04 7.49

Japan Korea Marker (JKM) 57.00 57.60 16.36 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 4 2 4 7 9

US GFS CDDs 194 208 190 178 167

US GFS TDDs 198 210 194 185 176

Refinitiv US Weekly GFS Supply and Demand Forecasts

Prior Week Current Week Next Week This Week Five-Year

Last Year Average For

Month

US Supply (bcfd)

US Lower 48 Dry Production 96.8 97.2 97.7 94.0 86.5

US Imports from Canada 7.1 7.5 7.5 8.3 8.0

US LNG Imports 0.0 0.0 0.0 0.0 0.1

Total US Supply 103.8 104.7 105.2 102.3 94.6

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US Demand (bcfd)

US Exports to Canada 2.5 2.5 2.3 2.3 2.5

US Exports to Mexico 5.8 5.5 5.7 6.3 5.4

US LNG Exports 10.9 11.0 10.6 10.6 4.4

US Commercial 4.5 4.5 4.5 4.5 4.5

US Residential 3.5 3.6 3.7 3.6 3.4

US Power Plant 40.1 40.3 41.5 41.2 38.8

US Industrial 21.3 21.3 21.3 21.0 21.2

US Plant Fuel 4.8 4.8 4.8 4.8 4.8

US Pipe Distribution 2.0 2.0 2.1 2.0 2.1

US Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

Total US Consumption 76.3 76.6 78.1 77.2 74.9

Total US Demand 95.5 95.6 96.7 96.4 87.2

US weekly power generation percent by fuel – EIA

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

Aug 26 Aug 19 Aug 12 Aug 5 Jul 29

Wind 7 6 6 8 7

Solar 3 3 3 3 3

Hydro 6 6 5 5 5

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 42 42 45 42 42

Coal 22 22 22 21 22

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Nuclear 18 19 17 17 17

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

Hub Current Day Prior Day

Henry Hub 9.14 9.42

Transco Z6 New York 8.09 8.50

PG&E Citygate 10.04 10.23

Dominion South 8.01 8.31

Chicago Citygate 8.45 8.59

Algonquin Citygate 8.40 8.85

SoCal Citygate 9.08 10.84

Waha Hub 7.78 8.47

AECO 0.74

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

Hub Current Day Prior Day

New England 99.50 98.00

PJM West 100.00 113.25

Ercot North 85.00 110.00

Mid C 75.00 112.25

Palo Verde 80.75 99.75

SP-15 82.25 103.00

(Reporting by Bharat Govind Gautam and Kavya Guduru in Bengaluru; Editing by Kirsten Donovan)

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