By Scott DiSavino
June 24 (Reuters) –US natural gas futures eased about 1% to a two-week low on Monday as output slowly rises and on forecasts for less hot weather and lower cooling demand next week than previously expected.
That price decline came despite forecasts for more hot weather and cooling demand this week than previously expected.
Front-month gas futures NGc1 for July delivery on the New York Mercantile Exchange fell 2.6 cents, or 1.0%, to $2.679 per million British thermal units (mmBtu) at 8:51 am EDT (1251 GMT), putting the contract on track for its lowest close since June 4 for a third day in a row.
Recent declines in the July contract boosted the premium of futures for August over July NGN24-Q24 to a record high – currently 14 cents per mmBtu – for a second day in a row.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 US states rose to an average of 98.4 billion cubic feet per day (bcfd) so far in June, up from a 25-month low of 98.1 bcfd in May. That compares with a monthly record high of 105.5 bcfd in December 2023.
Analysts said the production increase, which started in late May, was a sign that some drillers were slowly boosting output after a 47% jump in future prices in April and May. Prices were also up about 5% so far in June.
On a daily basis, output hit a 10-week high of 99.6 bcfd on Sunday. So far in June, CEOs at EQT EQT.N and Chesapeake Energy CHK.O said their companies have started to increase output.
Overall, however, US gas production was still down around 7% so far in 2024 after several energy firms, including EQT and Chesapeakedelayed well completions and cutting drilling activities after prices fell to 3-1/2-year lows in February and March.
Chesapeake is on track to overtake EQT as the biggest US gas producer after Chesapeake completes its planned merger with Southwestern Energy SWN.N.
Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 9 – just not as hot as previously forecast. LSEG forecast that heat would increase the amount of gas power generators burn to keep air conditioners humming.
With less heat expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 104.5 bcfd this week to 102.3 bcfd next week. The forecast for this week was higher than LSEG’s outlook on Friday, while its forecast for next week was lower.
Gas flows to the seven big US LNG export plants held at 12.9 bcfd so far in June, the same as in May.
That remains well below the monthly record high of 14.7 bcfd in December 2023 due to ongoing plant and pipeline maintenance at several Louisiana facilities, including Cameron LNG, Cheniere Energy’s LNG.N Sabine Pass and Venture Global’s Calcasieu Pass.
| Week ended June 21 Forecast | Week ended June 14 Current | Year ago June 21 | Five-year average June 21 | ||
| US weekly natgas storage change (bcf): | +47 | +71 | +81 | +85 | |
| US total natgas in storage (bcf): | 3,092 | 3,045 | 2,783 | 2,569 | |
| US total storage versus 5-year average | 20.4% | 22.6% | |||
| Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
| Henry Hub NGc1 | 2.72 | 2.71 | 2.47 | 2.66 | 3.60 |
| Title Transfer Facility (TTF) TRNLTTFMc1 | 10.68 | 10.64 | 10.32 | 13.04 | 14.39 |
| Japan Korea Marker (JKM) JKMc1 | 12.47 | 12.60 | 10.61 | 14.39 | 14.31 |
| LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days | |||||
| Two-Week Total Forecast | Current Day | Prior Day | Prior Year | 10-Year Norm | 30-Year Norm |
| US GFS HDDs | 6 | 5 | 4 | 6 | 6 |
| US GFS CDDs | 245 | 250 | 202 | 192 | 185 |
| US GFS TDDs | 251 | 255 | 206 | 198 | 191 |
| LSEG US Weekly GFS Supply and Demand Forecasts | |||||
| Prior Week | Current Week | Next Week | This Week Last Year | Five-Year (2019-2023) Average For Month | |
| US Supply (bcfd) | |||||
| US Lower 48 Dry Production | 98.8 | 99.4 | 99.5 | 102.3 | 94.7 |
| US Imports from Canada | 8.0 | 7.5 | 7.2 | N/A | 7.8 |
| US LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total US Supply | 106.8 | 106.9 | 106.7 | N/A | 112.5 |
| US Demand (bcfd) | |||||
| US Exports to Canada | 1.7 | 1.9 | 1.9 | N/A | 23 |
| US Exports to Mexico | 7.2 | 6.8 | 7.0 | N/A | 6.0 |
| US LNG Exports | 12.6 | 12.7 | 13.0 | 11.8 | 8.5 |
| US Commercial | 4.5 | 4.4 | 4.3 | 4.4 | 4.8 |
| US Residential | 3.8 | 3.7 | 3.6 | 3.7 | 4.3 |
| US Power Plant | 39.4 | 46.0 | 43.7 | 40.6 | 36.3 |
| US Industrial | 21.6 | 21.7 | 21.6 | 21.3 | 21.3 |
| US Plant Fuel | 4.9 | 4.9 | 4.9 | 4.9 | 4.9 |
| US Pipe Distribution | 2.0 | 2.2 | 2.1 | 2.0 | 1.9 |
| US Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
| Total US Consumption | 76.4 | 83.1 | 80.4 | 77.0 | 73.6 |
| Total US Demand | 98.0 | 104.5 | 102.3 | N/A | 90.4 |
| N/A is Not Available | |||||
| US Northwest River Forecast Center (NWRFC) at The Dalles Dam | Current Day % of Normal Forecast | Prior Day % of Normal Forecast | 2023 % of Normal Current | 2022 % of Normal Current | 2021 % of Normal Current |
| Apr-Sep | 75 | 76 | 83 | 107 | 81 |
| Jan-Jul | 76 | 76 | 77 | 102 | 79 |
| Oct-Sep | 78 | 79 | 76 | 103 | 81 |
| US weekly power generation percent by fuel – EIA | |||||
| Week ended Jun 28 | Week ended Jun 21 | Week ended Jun 14 | Week ended Jun 7 | Week ended May 31 | |
| wind | 9 | 12 | 9 | eleven | eleven |
| Solar | 6 | 6 | 6 | 6 | 6 |
| Hydro | 9 | 6 | 7 | 7 | 7 |
| Other | 1 | 1 | 1 | 1 | 1 |
| Petroleum | 0 | 0 | 0 | 0 | 0 |
| Natural Gas | 43 | 40 | 41 | 41 | 40 |
| Coal | 18 | 18 | 16 | fifteen | 14 |
| Nuclear | 17 | 17 | 19 | 19 | twenty |
| SNL US Natural Gas Next-Day Prices ($ per mmBtu) | |||||
| Hub | Current Day | Prior Day | |||
| Henry Hub NG-W-HH-SNL | 2.44 | 2.39 | |||
| Transco Z6 New York NG-CG-NY-SNL | 2.15 | 2.25 | |||
| PG&E Citygate NG-CG-PGE-SNL | 2.27 | 2.11 | |||
| Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 2.07 | 2.00 | |||
| Chicago Citygate NG-CG-CH-SNL | 2.21 | 2.17 | |||
| Algonquin Citygate NG-CG-BS-SNL | 2.20 | 3.35 | |||
| SoCal Citygate NG-SCL-CGT-SNL | 2.00 | 1.77 | |||
| Waha Hub NG-WAH-WTX-SNL | 0.22 | 0.73 | |||
| AECO NG-ASH-ALB-SNL | 0.52 | 0.62 | |||
| SNL US Power Next-Day Prices ($ per megawatt-hour) | |||||
| Hub | Current Day | Prior Day | |||
| New England EL-PK-NPMS-SNL | 36.75 | 48.75 | |||
| PJM West EL-PK-PJMW-SNL | 56.75 | 72.00 | |||
| Ercot North EL-PK-ERTN-SNL | 31.25 | 33.00 | |||
| Mid C EL-PK-MIDC-SNL | 48.61 | 1.56 | |||
| Green stick EL-PK-PLVD-SNL | 35.75 | 29.25 | |||
| SP-15 EL-PK-SP15-SNL | 38.00 | 27.50 |
Reporting by Scott DiSavino; Editing by Anil D’Silva
For gas data on LSEG's Eikon type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.
For Interactive Map, type 'Interactive Map' in the box at upper left of the Eikon terminal
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SNL U.S. gas prices, see: 0#SNL-NG
For next-day SNL U.S. power prices, see: 0#SNL-PWR
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/
For U.S. Northwest hydro power report, see: NWRFC
For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
For the U.S. natural gas speed guide, see: USGAS
For the U.S. power speed guide, see: USPOWER
To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)
NYMEX Henry Hub options and futures combined 0#3CFTC023651
NYMEX Henry Hub futures only 0#1CFTC023651
ICE Henry Hub options and futures combined 0#3CFTC023391
NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B
NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C
