US natural gas prices ease 1% as mild weather forecasts keep heating demand low
Mild weather expected to continue through mid-November
December contract still up about 21% to three-week high
Analysts project average gas output to decline in 2024
By Scott DiSavino
Oct 30 (Reuters) -U.S. natural gas futures eased about 1% on Wednesday on forecasts for mild weather to continue through mid-November, keeping heating demand low and allowing utilities to inject more gas into storage than normal for at least a few more weeks.
But with the start of the higher-priced December contract as the front-month and the expiry of the lower-priced November futures on Tuesday, the front-month was still up about 21% to a three-week high. That puts the front-month on track for its biggest daily percentage gain since it soared about 26% on April 29 when the higher-priced June contract replaced the lower-priced May futures as the front-month.
On its first day as the front-month, gas futures NGc1 for December delivery on the New York Mercantile Exchange were down 4.1 cents, or 1.4%, to $2.818 per million British thermal units (mmBtu) at 8:45 a.m. EDT (1245 GMT), putting the contract on track for its highest close since Oct. 4.
With mild weather squeezing demand, analysts projected utilities last week injected more gas into storage than normal for a second week in a row for the first time since October 2023. There was about 5% more gas in storage than normal for this time of year. EIA/GAS NGAS/POLL
Prior to last week, storage injections had been smaller than usual for 14 weeks in a row because many producers have reduced drilling activities so far this year after average spot monthly prices at the U.S. Henry Hub NG-W-HH-SNL benchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then.
SUPPLY AND DEMAND
Financial group LSEG said average gas output in the Lower 48 U.S. states has slipped to 101.7 billion cubic feet per day (bcfd) so far in October, down from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023.
With so many firms curtailing drilling activities, analysts projected average output in calendar 2024 will decline for the first time since 2020 when the COVID pandemic cut demand for the fuel.
Looking ahead, however, analysts projected producers would boost output later this year and in 2025 to meet rising liquefied natural gas (LNG) export demand with two new export plants - Venture Global LNG's Plaquemines in Louisiana and Cheniere Energy's LNG.N Corpus Christi stage 3 expansion in Texas - expected to start producing LNG later this year.
At Plaquemines, two tankers owned by Venture Global - Venture Bayou and Venture Gator - were still anchored near the mouth of the Mississippi River. Analysts said they expect Venture Global to use the tankers to test equipment that loads fuel onto vessels as part of Plaquemines' commissioning process.
Meteorologists projected the weather in the Lower 48 states would remain warmer than normal through at least Nov. 14. But even warmer-than-normal weather in early November is cooler than warmer-than-normal weather in late October.
So with seasonally cooler weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 99.4 bcfd this week to 102.6 bcfd next week. The forecast for next week was lower than LSEG's outlook on Tuesday.
The amount of gas flowing to the seven big U.S. LNG export plants has risen to an average of 13.1 bcfd so far in October, up from 12.7 bcfd in September. That compares with a monthly record high of 14.7 bcfd in December 2023.
Week ended Oct 25 Forecast | Week ended Oct 18 Actual | Year ago Oct 25 | Five-year average Oct 25 | ||
U.S. weekly natgas storage change (bcf): | +76 | +80 | +77 | +67 | |
U.S. total natgas in storage (bcf): | 3,861 | 3,785 | 3,756 | 3,685 | |
U.S. total storage versus 5-year average | 4.8% | 4.6% | |||
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 | 2.84 | 2.86 | 3.15 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 13.28 | 13.81 | 14.55 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 13.69 | 13.76 | 16.30 | 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 |
U.S. GFS HDDs | 170 | 170 | 207 | 212 | 233 |
U.S. GFS CDDs | 31 | 29 | 26 | 23 | 17 |
U.S. GFS TDDs | 201 | 199 | 133 | 235 | 250 |
LSEG U.S. Weekly GFS Supply and Demand Forecasts | |||||
Prior Week | Current Week | Next Week | This Week Last Year | Five-Year (2019-2023) Average For Month | |
U.S. Supply (bcfd) | |||||
U.S. Lower 48 Dry Production | 101.7 | 102.7 | 102.7 | 104.1 | 96.8 |
U.S. Imports from Canada | 7.8 | 8.1 | 7.4 | N/A | 7.1 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 109.5 | 110.7 | 110.1 | N/A | 103.9 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 2.2 | 2.3 | 2.3 | N/A | 2.3 |
U.S. Exports to Mexico | 5.6 | 6.3 | 6.2 | N/A | 5.9 |
U.S. LNG Exports | 13.0 | 13.2 | 13.5 | 14.2 | 10.0 |
U.S. Commercial | 6.4 | 7.2 | 8.2 | 10.3 | 6.9 |
U.S. Residential | 7.0 | 8.7 | 11.1 | 14.8 | 7.3 |
U.S. Power Plant | 31.5 | 32.0 | 30.2 | 31.0 | 30.9 |
U.S. Industrial | 22.3 | 22.5 | 22.8 | 23.9 | 22.3 |
U.S. Plant Fuel | 5.0 | 5.1 | 5.1 | 5.1 | 5.0 |
U.S. Pipe Distribution | 2.0 | 2.1 | 2.1 | 2.1 | 2.0 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 74.3 | 77.6 | 79.6 | 87.3 | 74.5 |
Total U.S. Demand | 95.2 | 99.4 | 101.6 | N/A | 92.7 |
N/A is Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam | 2025 Current Day % of Normal Forecast | 2025 Prior Day % of Normal Forecast | 2024 % of Normal Actual | 2023 % of Normal Actual | 2022 % of Normal Actual |
Apr-Sep | 91 | 92 | 74 | 83 | 107 |
Jan-Jul | 87 | 88 | 76 | 77 | 102 |
Oct-Sep | 89 | 90 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Nov 1 | Week ended Oct 25 | 2023 | 2022 | 2021 | |
Wind | 15 | 14 | 10 | 11 | 10 |
Solar | 5 | 6 | 4 | 3 | 3 |
Hydro | 4 | 5 | 6 | 6 | 7 |
Other | 1 | 2 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 42 | 42 | 41 | 38 | 37 |
Coal | 14 | 14 | 17 | 21 | 23 |
Nuclear | 19 | 18 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 1.82 | 2.03 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.36 | 1.85 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.44 | 4.40 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.29 | 1.66 | |||
Chicago Citygate NG-CG-CH-SNL | 1.43 | 1.88 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.47 | 1.88 | |||
SoCal Citygate NG-SCL-CGT-SNL | 1.61 | 2.65 | |||
Waha Hub NG-WAH-WTX-SNL | 0.17 | -0.89 | |||
AECO NG-ASH-ALB-SNL | 0.44 | 0.68 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 28.50 | 48.50 | |||
PJM West EL-PK-PJMW-SNL | 35.00 | 35.50 | |||
Ercot North EL-PK-ERTN-SNL | 14.50 | 22.25 | |||
Mid C EL-PK-MIDC-SNL | 38.75 | 37.75 | |||
Palo Verde EL-PK-PLVD-SNL | 23.50 | 5.75 | |||
SP-15 EL-PK-SP15-SNL | 18.75 | 23.00 |
text_section_type="notes">For gas data on the LSEG terminal 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 LSEG 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
Reporting by Scott DiSavino; Editing by Paul Simao
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