(Adds latest prices) By Scott DiSavino NEW YORK, Nov 21 (Reuters) – US natural gas futures fell about 1% to a seven-week low on Tuesday on record output that should enable utilities to keep injecting gas into storage through late November, instead of pulling gas out of storage to meet heating demand as usual. US gas stockpiles were expected to rise from 6% above normal during the week ended Nov. 10 to 7% in the week ended Nov. 17, according to analysts’ estimates. Prices drew some support from forecasts for colder weather and higher heating demand over the next two weeks, and record amounts of gas flows to liquefied natural gas (LNG) export plants. Front-month gas futures for December delivery on the New York Mercantile Exchange fell 3.6 cents, or 1.2%, to settle at $2.846 per million British thermal units (mmBtu). For the second day, the close was, their lowest since Oct. 2. One factor keeping a lid on future prices has been lower spot or next-day prices at the Henry Hub benchmark in Louisiana. The spot market has traded below front-month futures for 186 out of 223 trading days this year, according to data from financial firm LSEG. Next-day prices at the Henry Hub were down about 5% to $2.49 per mmBtu for Tuesday. Analysts have noted that so long as spot prices remain far enough below front-month futures to cover margin and storage costs, traders should be able to lock in arbitrage profits by buying spot gas, storing it and selling a futures contract. With production at record highs and ample amounts of gas in storage, the futures market is sending signals that some traders have given up hope of seeing winter price spikes from November through March. For instance, the premium of futures for January over December was at its lowest since November 2022, while the premium of March 2024 futures over April 2024 fell to a record low for a fourth day. Futures for April, the first month of the summer injection season, were close to overtaking March, the last month of the winter withdrawal season. Bob Yawger, director of energy futures at Mizuho Bank said “Gas is basically a heating fuel and should never trade winter under summer.” The premium of futures for 2025 over 2024, meanwhile, rose to 80 cents per mmBtu, a fourth record high in a row. Analysts expect prices to rise in 2025 as gas demand increases once several new LNG export plants enter service in the US, Canada and Mexico. SUPPLY AND DEMAND LSEG said average gas output in the Lower 48 US states rose to 107.5 billion cubic feet per day (bcfd) so far in November from a record 104.2 bcfd in October. On a daily basis, output hit a record 108.9 bcfd on Monday, topping the prior all-time high of 108.6 bcfd on Sunday. Meteorologists projected the weather would swing from warmer than normal now to colder than normal from Nov. 24-Dec. 1 before turning warmer than normal again from Dec. 3-6. With colder weather coming, LSEG forecast US gas demand in the Lower 48 states, including exports, would jump from 112.5 bcfd this week to 129.7 bcfd next week. Those forecasts were higher than Refinitiv’s outlook on Monday. Gas flows to the seven big US LNG export plants rose to an average of 14.2 bcfd so far in November, up from 13.7 bcfd in October and a monthly record of 14.0 bcfd in April. Week ended Week ended Year ago Five-year Nov 17 Nov 10 Nov 17 average Current Forecast Nov 17 US weekly natgas storage change (bcf): +7 +60 -60 -53 US total natgas in storage (bcf): 3,840 3,833 3,575 3,577 US total storage versus 5-year average 7.4% 5.6% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.89 2.88 6.43 6.54 2.89 Title Transfer Facility (TTF) 14.47 14.67 35.88 40.50 7.49 Japan Korea Marker (JKM) 17.13 16.98 28.37 34.11 8.95 LSEG 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 347 346 343 319 332 US GFS CDDs 5 6 7 8 7 US GFS TDDs 352 352 350 327 339 LSEG US Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year Average For Month US Supply (bcfd) US Lower 48 Dry Production 107.6 108.3 108.2 101.6 94.4 US Imports from Canada 8.3 8.0 8.4 9.8 8.3 US LNG Imports 0.0 0.0 0.0 0.0 0.1 Total US Supply 115.9 116.3 116.7 111 .4 102.8 US Demand (bcfd) US Exports to Canada 3.1 3.0 3.1 3.4 2.9 US Exports to Mexico 6.0 5.3 6.0 5.6 5.3 US LNG Exports 14.4 14.4 14.4 11.8 7.9 US Commercial 10.6 11.4 15.7 14.6 11.7 US Residential 15.5 17.1 25. 7 23.8 17.5 US Power Plant 31.8 29.7 31.3 29.9 27.5 US Industrial 23.3 23.7 25.3 24.8 24.3 US Plant Fuel 5.3 5.3 5.3 5.3 5.2 US Pipe Distribution 2.4 2.4 2.8 2.4 2.3 US Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total US Consumption 88.9 88.8 106.3 100.9 88.6 Total US Demand 112.4 112.5 129.7 121.7 104.7 US Northwest River Forecast Center ( NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Current Current Current Apr-Sep 84 86 83 107 81 Jan-Jul 82 84 77 102 79 Oct -Sep 83 85 76 103 81 US weekly power generation percent by fuel – EIA Week ended Week ended Week ended Week ended Week ended Nov 24 Nov 17 Nov 10 Nov 3 Oct 27 Wind 10 11 11 14 Solar 3 4 4 4 Hydro 6 5 5 5 Other 2 2 1 2 Petroleum 0 0 0 0 Natural Gas 42 41 40 40 Coal 17 16 19 16 Nuclear 20 20 19 19 SNL US Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.49 2.62 Transco Z6 New York 2.32 2.53 PG&E Citygate 5.82 5.71 Eastern Gas (old Dominion South) 2.21 2.22 Chicago Citygate 2.35 2.39 Algonquin Citygate 3.04 3.53 SoCal Citygate 5.79 5.35 Waha Hub 2.07 1.55 AECO 1.75 1.78 SNL US Power Next- Day Prices ($ per megawatt-hour ) Hub Current Day Prior Day New England 47.25 36.00 PJM West 47.50 35.00 Ercot North 20.00 22.00 Mid C 76.33 80.42 Palo Verde 50.75 45.00 SP-15 50.50 47.00 (Reporting by Scott DiSavino; editing by Jonathan Oatis and David Gregorio)
