Friday, September 24

US natgas slides 3% on milder weather view, post-Ida restarts


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US natural gas futures slipped about 3% on Tuesday as forecasts projected milder weather

and energy firms continued efforts to restart facilities along the US Gulf Coast after Hurricane Ida.

Front-month gas futures for October delivery fell 14.4 cents, or 3.1%, to settle at $4.568 per million

British thermal units, ending a session down for the first time in five sessions.

Energy companies continued efforts to restart facilities with Royal Dutch Shell Plc, the largest US

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Gulf Coast producer, redeploying personnel to its Auger asset and Enchilada/Salsa assets.

“There are some expectations that more offshore production will be returning this week in the Gulf of Mexico,”

said Marshall Steeves, energy markets analyst at IHS Markit, adding that fewer cooling degree days with the summer

season coming to a close further weighed on gas prices.

“But storage is still tight and we’re probably going to see more lower-than-average injections as long as Ida

remains a force and as offline production is going to be slow to return over the course of this week,” Steeves

added.

Data provider Refinitiv said total US production has averaged 89.4 billion cubic feet per day (bcfd) so far

in September, down from 92.0 bcfd in August.

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Goldman Sachs also said in a note that recent tighter-than-consensus storage injections added to existing

winter storage concerns and further increased the winter risk premium priced in the market.

The bank raised its price forecasts for summer and winter 2022 and winter 2023 by $0.15.

US pipeline exports to Mexico rose to an average 5.9 bcfd so far this month, from 6.2 bcfd in August, but

were slightly lower than June’s monthly record of 6.7 bcfd.

With European and Asian gas both trading over $18 per mmBtu, compared with just under $5

for the US fuel, analysts expect US liquefied natural gas exports to remain elevated.

Week ended Sept Week ended Aug Year ago Five-year

3 (Forecast) 27 (Actual) Sept 3 average Sept 3

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US weekly natgas storage change (bcf): 36 20 65 65

US total natgas in storage (bcf): 2,907 2,871 3,515 3,158

US total storage versus 5-year average -7.9% -7.2%

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

Month Average 2020 Average

Last (2016-202

Year 0)

Henry Hub 4.615 4.712 2.130 2.660

Title Transfer Facility (TTF) 18.720 17.950 3.240 5.190

Japan Korea Marker (JKM) 18.460 18.020 4.220 6.490

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

Degree Days

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

Year Norm

US GFS HDDs 13 10 37 29 28

US GFS CDDs 149 157 103 135 125

US GFS TDDs 162 167 140 164 153

Refinitiv US Weekly GFS Supply and Demand Forecasts

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Prior Week Current Week Next This Week Last Five-Year

Week Year Average

For Month

US Supply (bcfd)

US Lower 48 Dry Production 89.5 89.6 90.1 82.6

US Imports from Canada 7.0 6.9 7.0 7.6

US LNG Imports 0.0 0.0 0.0 0.1

Total US Supply 96.5 96.5 97.1 90.3

US Demand (bcfd)

US Exports to Canada 2.4 2.7 2.6 2.3

US Exports to Mexico 6.3 5.8 6.1 5

US LNG Exports 10.5 10.9 10.9 3.1

US Commercial 4.5 4.6 4.7 4.8

US Residential 3.6 3.6 3.8 3.8

US Power Plant 37.1 32.1 31.8 32.8

US Industrial 21.0 20.9 21.0 21.1

US Plant Fuel 4.4 4.4 4.5 4.4

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 72.8 67.5 67.7 68.9

Total US Demand 92.0 86.9 87.4 79.3

SNL US Natural Gas Next-Day Prices ($

per mmBtu)

Hub Current Day Prior Day

Henry Hub 4.8 4.7

Transco Z6 New York 3.4 3.8

PG&E Citygate 5.9 5.7

Dominion South 3.4 3.8

Chicago Citygate 4.5 4.5

Algonquin Citygate 3.5 3.9

SoCal Citygate 6.0 5.5

Waha Hub 4.7 4.5

SNL US Power Next-Day Prices ($ per

megawatt-hour)

Hub Current Day Prior Day

New England 37.5 39.5

PJM West 27.8 29.8

Ercot North 56.5 52.8

Mid C 94.0 50.0

Palo Verde 65.5 42.0

SP-15 65.3 52.0

(Reporting by Nakul Iyer in Bengaluru; Editing by Nick Zieminski and Richard Chang)

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