UPDATE 2-U.S. natgas rises on record LNG exports, higher demand views

UPDATE 2-U.S. natgas rises on record LNG exports, higher demand views

 2021-03-29 11:53
UPDATE 2-U.S. natgas rises on record LNG exports, higher demand views

Updates prices

March 29 (Reuters) - U.S. natural gas futures rose on Monday on record liquefied natural gas (LNG) exports and forecasts for slightly higher demand this week, while the possibility of an early start to the injection season partly limited gains.

On their last day as the front-month, gas futures NGc1 for April delivery on the New York Mercantile Exchange rose 2.9 cents, or 1.1%, to settle at $2.586 per million British thermal units.

"Natural gas is getting a bounce partly because of increased demand expectations and concerns over the delay of LNG shipments, because of the Suez Canal," said Phil Flynn, a senior analyst at Price Futures Group in Chicago.

"Some of the power outages we saw from Texas are ending, so we are seeing more electricity demand. So a combination of those factors are giving a little bit of support."

Shipping traffic through Egypt's Suez Canal has resumed after the refloating of a giant container ship that had been blocking the busy waterway for almost a week. nL1N2LR06I nC6N2J002N

Data provider Refinitiv estimated 181 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states. The normal number for this time of year is 213 HDDs.

HDDs measure the number of degrees a day's average temperature is below 65 degrees Fahrenheit (18 degrees Celsius) and are used to estimate demand to heat homes and businesses.

Refinitiv projected average gas demand, including exports, would rise to 99.2 bcfd this week from 97.5 bcfd in the prior week.

The amount of gas flowing to U.S. LNG export plants, meanwhile, has averaged 10.7 bcfd so far in March. That compares with a four-month low of 8.5 bcfd in February, when extreme cold cut power and gas supplies to the facilities, and puts feedgas on track to match the monthly record of 10.7 bcfd in December. nL1N2LH11V

Buyers around the world continue to purchase near-record amounts of U.S. gas because prices in Europe TRNLTTFMc1 and Asia JKMc1 remain high enough to cover the cost of buying and transporting the U.S. fuel across the ocean.

However, there is "market anticipation of a possible storage injection to be announced this Thursday. If so, then this year's injection season will start one week earlier than usual, which indicates a somewhat bearish news to the market", said Zhen Zhu, economist at Oklahoma City-based C.H. Guernsey.

Output in the Lower 48 has averaged 91.1 billion cubic feet per day (bcfd) so far in March, up sharply from a 28-month low of 86.5 bcfd in February. That, however, was still much lower than the record monthly high of 95.4 bcfd in November 2019.


Week ended Mar 26 (Forecast)

Week ended Mar 19(Actual)

Year ago Mar 26

Five-year average Mar 26


U.S. natgas storage (bcf):

+22

-36

-20

-24














Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2020

Five Year Average (2016-2020)

Henry Hub NGc1

2.59

2.56

1.73

2.13

2.66

Title Transfer Facility (TTF) TRNLTTFMc1

6.33

6.52

2.72

3.24

5.19

Japan Korea Marker (JKM) JKMc1

6.87

6.93

3.14

4.22

6.49













Refinitiv 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

U.S. GFS HDDs

181

183

187

198

213

U.S. GFS CDDs

26

23

26

25

19

U.S. GFS TDDs

207

206

213

223

232







Refinitiv U.S. Weekly GFS Supply and Demand Forecasts



Prior Week

Current Week

Next Week

This Week Last Year

Five-Year Average For Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production

91.2

91.1

91.1

92.9

81.0

U.S. Imports from Canada

7.6

7.5

7.7

6.7

8.3

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.2

Total U.S. Supply

98.8

98.6

98.9

99.6

89.5


U.S. Demand (bcfd)

U.S. Exports to Canada

3.2

3.3

3.2

2.5

2.7

U.S. Exports to Mexico

6.0

5.9

5.7

5.5

4.4

U.S. LNG Exports

11.2

11.9

10.7

9.3

3.4

U.S. Commercial

9.8

10.1

8.6

9.7

11.9

U.S. Residential

14.4

14.4

11.8

14.1

18.8

U.S. Power Plant

23.3

24.3

23.4

26.9

24.9

U.S. Industrial

22.9

23.2

22.6

22.9

23.0

U.S. Plant Fuel

4.5

4.5

4.5

4.5

4.5

U.S. Pipe Distribution

2.1

2.1

1.9

2.1

2.5

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

77.1

78.8

73.0

80.3

85.7

Total U.S. Demand

97.5

99.2

92.7

97.6

96.2













SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)


Hub

Current Day

Prior Day




Henry Hub NG-W-HH-SNL

2.59

2.52




Transco Z6 New York NG-CG-NY-SNL

1.62

1.78




PG&E Citygate NG-CG-PGE-SNL

3.59

3.63




Dominion South NG-PCN-APP-SNL

1.71

1.75




Chicago Citygate NG-CG-CH-SNL

2.32

2.42




Algonquin Citygate NG-CG-BS-SNL

1.80

1.85




SoCal Citygate NG-SCL-CGT-SNL

2.68

2.94




Waha Hub NG-WAH-WTX-SNL

2.15

2.25










SNL U.S. Power Next-Day Prices ($ per megawatt-hour)


Hub

Current Day

Prior Day




New England EL-PK-NPMS-SNL

20.50

24.00




PJM West EL-PK-PJMW-SNL

17.50

21.25




Ercot North EL-PK-ERTN-SNL

24.75

21.25




Mid C EL-PK-MIDC-SNL

20.25

23.25




Palo Verde EL-PK-PLVD-SNL

19.00

25.00




SP-15 EL-PK-SP15-SNL

21.75

28.50





(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Steve Orlofsky, Jonathan Oatis and Paul Simao)

((BharatGovind.Gautam@thomsonreuters.com; +91-80-6182-3021/ 3590 (If within U.S. call 651-848-5832 );))

For Refinitiv, formerly Thomson Reuters Supply Chain & Commodities Research (SC&CR), type ENERGY in Eikon search bar and then go to the GAS dropdown and the NORTH AMERICA dropdown or see: cpurl://apps.cp./cms/?pageid=usa-gas

For Thomson Reuters Interactive Map, type 'Interactive Map' in the box at upper left of the Reuters 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