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US natural gas futures were little changed on Tuesday, as forecasts for less demand over the next week offset support
from expectations of a dip in production going forward.
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Front-month gas futures for June delivery on the New York Mercantile Exchange settled mostly unchanged at $2.376
per million British thermal units (mmBtu). The contract hit its highest since April 28 earlier in the session.
“The gas market posted little change but the early 2-1/2-week highs are keeping this 3-day bull move alive for now
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until the demand side of the ledger offers a larger offset against the latest supply side headlines that featured last
Friday’s reported plunge in the gas rig counts,” Ritterbusch and Associates said in a note.
A number of oil and gas companies in Canada’s main crude-producing province Alberta restarted production after wildfires
forced them to temporarily curtail output.
Energy services firm Baker Hughes Co on Friday said the gas rig count, an early indicator of future output, fell
by 16 to 141 in the week to May 12, the lowest since April 2022.
“A combination of the reduction of production in Canada and the substantial drop in (US) rig counts seems to signal that
We may have turned the bottom,” Phil Flynn, senior analyst at Price Futures Group in Chicago.
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But looking ahead, “the perception of oversupply continuing into the summer is going to weigh a little bit.”
Data provider Refinitiv said average gas output in the US Lower 48 states was 101.5 billion cubic feet per day (bcfd).
Meanwhile, in Europe gas fell to a fresh near two-year low amid tepid demand and strong supply, but lower wind speeds
supported day-ahead prices.
Meteorologists projected the weather in the US Lower 48 states would switch from warmer-than-normal levels from May
12-17 to near-normal from May 18-27.
Refinitiv forecasts that US gas demand, including exports, would fall from 92.0 billion cubic feet per day (bcfd) this
week to 89.0 bcfd next week.
Week ended Week Year ago Five-year
May 12 ended May 12 average
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(Forecast) May 5 May 12
(Actual)
US weekly natgas storage change (bcf): 106 78 87 91
US total natgas in storage (bcf): 2,247 2,141 1,719 1,900
US total storage versus 5-year average 18.3% 18.4%
Global Gas Benchmark Futures ($ per mmBtu) Current Prior This Prior Year Five Year
Day Day Month Average Average
Last 2022 (2018-2022)
year
Henry Hub 2.35 2.37 8.16 6.54 3.60
Title Transfer Facility (TTF) 10.43 10.74 28.96 40.50 14.39
Japan Korea Marker (JKM) 10.03 11.16 22.70 34.11 14.31
Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast Current Prior Prior 10-Year 30-Year
Day Day Year Norm Norm
US GFS HDDs 25 30 37 46 52
US GFS CDDs 89 88 113 99 93
US GFS TDDs 114 118 150 145 145
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Refinitiv US Weekly GFS Supply and Demand Forecasts
Prior Week Current Next This Week Five-Year
Week Week Last Year Average For
month
US Supply (bcfd)
US Lower 48 Dry Production 101.3 101.5 101.8 96.9 89.1
US Imports from Canada 6.3 6.3 6.8 8.6 7.7
US LNG Imports 0.0 0.0 0.0 0.0 0.1
Total US Supply 107.6 107.8 108.6 105.5 96.9
US Demand (bcfd)
US Exports to Canada 1.8 2.0 1.9 2.9 2.3
US Exports to Mexico 5.6 5.4 5.5 6.3 5.2
US LNG Exports 13.0 12.8 13.0 12.2 7.0
US Commercial 5.4 5.0 4.7 5.8 5.7
US Residential 5.8 4.7 4.2 6.6 6.7
US Power Plant 31.0 33.6 31.4 28.6 27.5
US Industrial 21.4 21.3 21.3 20.9 21.3
US Plant Fuel 5.0 5.0 5.0 5.0 5.0
US Pipe Distribution 1.9 1.9 1.8 2.0 2.1
US Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
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Total US Consumption 70.6 71.8 68.6 69.0 68.4
Total US Demand 91.0 92.0 89.0 90.4 82.9
US weekly power generation percent by fuel – EIA
Week ended Week Week Week ended Week ended
May 12 ended Apr 21 Apr 14
May 5 Apr 28
Wind 11 13 12 17 15
Solar 5 5 4 5 5
Hydro 9 8 7 7 7
Other 2 2 3 3 2
Petroleum 0 0 0 0 0
Natural Gas 41 39 39 37 38
Coal 14 13 16 14 14
Nuclear 19 19 19 18 19
SNL US Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Prior
Day Day
Henry Hub
Transco Z6 New York
PG&E Citygate
Eastern Gas (old Dominion South)
Chicago Citygate
Algonquin Citygate
SoCal Citygate
Waha Hub
AECO
SNL US Power Next-Day Prices ($ per megawatt-hour)
Hub Current Prior
Day Day
New England
PJM West
Ercot North
Mid C
Palo Verde
SP-15
(Reporting by Rahul Paswan and Brijesh Patel in Bengaluru; Editing by Nick Zieminski and Marguerita Choy)
financialpost.com
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