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UPDATE 1-US natgas prices hit one-month lows on surplus inventory

Reuters
·5-min read

(Updates with settlement price) Nov 20 (Reuters) - U.S. natural gas futures fell on Monday to their lowest levels in about a month, pressured by forecasts of a milder winter and surplus storage levels. Front-month gas futures for December delivery on the New York Mercantile Exchange settled 7.20 cents lower at $2.89 per million British thermal units at 3:47 p.m. ET. The session low was the lowest since Oct. 23. "The market is looking at the possibility that we're going to have a warmer-than-average winter... and if that's the case, natural gas is going to have a hard time keeping up with gains," said Phil Flynn, an analyst at Price Futures Group. "That's leading the negativity today. The other thing is that we're going into the Thanksgiving Day holiday where demand traditionally slows." Utilities usually start pulling gas out of storage to meet heating demand in mid-November. U.S. gas stockpiles were already about 6% above normal in the week ended Nov. 10 and were expected to reach 7% above normal in the week ended Nov. 17, according to federal energy data and analysts estimates. U.S. utilities likely added 5 billion cubic feet (bcf) of natural gas into storage last week, as per a Reuters poll. That compares with a withdrawal of 60 bcf during the same week last year and a five-year average decrease of 53 bcf. "Friday's big selloff that is being furthered today is developing in the aftermath of a much larger than expected storage injection and amid some bearish tweaks to the short-term temperature view," said analysts at energy advisory Ritterbusch and Associates. "From here, our eventual downside possibility to the $2.75 area now appears capable of achievement this week as technical considerations embolden the speculators to add short positions." Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 107.5 billion cubic feet per day (bcfd) so far in November, up from a record 104.2 bcfd in October. Gas flows to the seven big U.S. LNG export plants rose to an average of 14.2 bcfd so far in November, up from 13.7 bcfd in October and a monthly record of 14.0 bcfd in April. Week ended Week ended Year ago Five-year Nov 17 Nov 10 Nov 17 average Forecast Actual Nov 17 U.S. weekly natgas storage change (bcf): +5 +60 -60 -53 U.S. total natgas in storage (bcf): 3,838 3,833 3,575 3,577 U.S. total storage versus 5-year average 7.3% 5.6% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2017-2021) Henry Hub 2.94 3.06 6.43 6.54 2.89 Title Transfer Facility (TTF) 14.63 14.45 35.88 40.50 7.49 Japan Korea Marker (JKM) 16.98 17.10 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 U.S. GFS HDDs 346 326 360 291 314 U.S. GFS CDDs 6 7 6 11 8 U.S. GFS TDDs 352 333 36 302 318 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 107.6 108.0 107.7 101.5 94.4 U.S. Imports from Canada 8.3 7.9 8.2 9.6 8.3 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 115.9 115.9 115.9 111.1 102.8 U.S. Demand (bcfd) U.S. Exports to Canada 3.1 3.0 3.1 2.3 2.9 U.S. Exports to Mexico 6.0 5.4 6.0 5.1 5.3 U.S. LNG Exports 14.4 14.3 14.1 12.1 7.9 U.S. Commercial 10.6 11.5 15.0 15.3 11.7 U.S. Residential 15.5 17.4 24.2 25.1 17.5 U.S. Power Plant 31.5 28.7 29.9 32.7 27.5 U.S. Industrial 23.3 23.7 25.0 25.6 24.3 U.S. Plant Fuel 5.3 5.3 5.3 5.3 5.2 U.S. Pipe Distribution 2.4 2.4 2.7 2.1 2.3 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 88.7 89.1 102.3 106.2 88.6 Total U.S. Demand 112.1 111.8 125.4 125.7 104.7 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Nov 17 Nov 10 Nov 3 Oct 27 Oct 20 Wind 11 14 10 Solar 4 4 5 Hydro 5 5 5 Other 1 2 2 Petroleum 0 0 0 Natural Gas 40 40 42 Coal 19 16 16 Nuclear 19 19 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.62 2.91 Transco Z6 New York 2.53 2.04 PG&E Citygate 5.71 6.24 Eastern Gas (old Dominion South) 2.22 2.01 Chicago Citygate 2.39 2.56 Algonquin Citygate 3.53 2.20 SoCal Citygate 5.35 6.20 Waha Hub 1.55 2.22 AECO 2.44 1.93 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 36.00 33.50 PJM West 35.00 42.50 Ercot North 22.00 36.50 Mid C 80.42 92.00 Palo Verde 45.00 64.50 SP-15 47.00 65.50 (Reporting by Tina Parate and Swati Verma in Bengaluru; Editing by Chizu Nomiyama and David Gregorio)