US natural gas prices edge up on lower output, higher demand forecasts
Hurricane Rafael causing curtailment of Gulf of Mexico output
NYMEX open interest hits record high for sixth day in a row
Utilities expected to keep filling storage through late November
By Scott DiSavino
Nov 8 (Reuters) -U.S. natural gas futures edged up about 1% on Friday on a decline in daily output and forecasts for seasonally cooler weather in late November that should boost heating demand and force utilities to start pulling fuel out of storage by the end of the month.
Until then, however, the weather was expected to remain mild, allowing utilities to keep injecting gas into storage for a couple more weeks.
There is currently about 6% more gas in storage than normal for this time of year. Analysts projected utilities would add more gas than normal into storage this week for a fourth week in a row for the first time since October 2022. EIA/GAS NGAS/POLL
Prior to the last few weeks, 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, dropping to a 23-year low in October.
Front-month gas futures NGc1 for December delivery on the New York Mercantile Exchange (NYMEX) were up 2.4 cents, or 0.9%, to $2.717 per million British thermal units at 8:08 a.m. EST (1308 GMT).
That put the contract up about 2% for the week after it gained 4% last week and 13% two weeks ago.
Open interest in NYMEX futures, meanwhile, rose to a record high for a sixth day in a row, reaching 1.785 million contracts on Nov. 6.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states has slid to 100.7 billion cubic feet per day (bcfd) so far in November from 101.3 bcfd in October. That compares with a record 105.3 bcfd in December 2023.
On a daily basis, output over the past four days fell by 2.0 bcfd to a preliminary five-month low of 99.6 bcfd on Friday. Analysts have noted that preliminary data is often revised later in the day.
Recent output declines were due mostly to pipeline issues and curtailments in the Gulf of Mexico for Hurricane Rafael.
The U.S. National Hurricane Center projected Rafael would circle around the middle of the Gulf of Mexico as it weakens into a tropical storm over the weekend and becomes a tropical depression near Mexico by the middle of next week.
Even though Rafael was not expected to make landfall in the U.S., several U.S. energy firms curtailed oil and gas output from offshore Gulf of Mexico platforms.
The U.S. Bureau of Safety and Environmental Enforcement said energy firms cut Gulf of Mexico gas production by about 10% on Thursday, up from 7% on Wednesday. But unlike 20 years ago, when 20% of U.S. gas production came from the federal offshore Gulf of Mexico, that offshore region only produces about 2% of the country's gas.
Meteorologists projected the weather in the Lower 48 states would remain warmer than normal through at least Nov. 23. But even warmer-than-normal weather in late November was still colder than warmer-than-normal weather in early November.
So with cooler weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 102.0 bcfd this week to 104.1 bcfd next week and 110.0 bcfd in two weeks.
The amount of gas flowing to the seven big U.S. LNG export plants has slid to an average of 12.6 bcfd so far in November, down from 13.1 bcfd in October. That compares with a monthly record high of 14.7 bcfd in December 2023.
Week ended Nov 8 Forecast | Week ended Nov 1 Actual | Year ago Nov 8 | Five-year average Nov 8 | ||
U.S. weekly natgas storage change (bcf): | +49 | +69 | +41 | +29 | |
U.S. total natgas in storage (bcf): | 3,981 | 3,932 | 3,816 | 3,746 | |
U.S. total storage versus 5-year average | 6.3% | 5.8% | |||
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 | 2.69 | 3.06 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 13.53 | 13.17 | 14.45 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 13.50 | 13.50 | 17.02 | 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 | 204 | 193 | 193 | 254 | 277 |
U.S. GFS CDDs | 22 | 24 | 18 | 16 | 11 |
U.S. GFS TDDs | 226 | 217 | 211 | 270 | 288 |
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 | 102.1 | 100.8 | 100.4 | 104.3 | 98.0 |
U.S. Imports from Canada | 8.2 | 8.5 | 8.2 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 110.4 | 109.4 | 108.5 | N/A | 105.9 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 2.3 | 2.4 | 2.4 | N/A | 2.9 |
U.S. Exports to Mexico | 5.7 | 5.6 | 5.9 | N/A | 5.5 |
U.S. LNG Exports | 13.3 | 12.4 | 13.8 | 13.8 | 11.0 |
U.S. Commercial | 7.2 | 8.0 | 8.6 | 8.8 | 11.5 |
U.S. Residential | 8.7 | 10.5 | 11.2 | 11.8 | 16.8 |
U.S. Power Plant | 32.0 | 33.0 | 32.1 | 28.7 | 28.8 |
U.S. Industrial | 22.5 | 22.7 | 22.8 | 22.6 | 24.3 |
U.S. Plant Fuel | 5.0 | 5.0 | 5.0 | 5.0 | 5.3 |
U.S. Pipe Distribution | 2.1 | 2.2 | 2.2 | 2.1 | 3.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 77.6 | 81.6 | 82.0 | 79.1 | 90.0 |
Total U.S. Demand | 99.0 | 102.0 | 104.1 | N/A | 109.4 |
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 | 2003 % of Normal Actual | 2022 % of Normal Actual |
Apr-Sep | 96 | 98 | 74 | 83 | 107 |
Jan-Jul | 91 | 92 | 76 | 77 | 102 |
Oct-Sep | 93 | 94 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Nov 8 | Week ended Nov 1 | 2023 | 2022 | 2021 | |
Wind | 13 | 15 | 10 | 11 | 10 |
Solar | 4 | 5 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 2 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 43 | 42 | 41 | 38 | 37 |
Coal | 14 | 14 | 17 | 21 | 23 |
Nuclear | 19 | 19 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 1.49 | 1.80 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.35 | 1.54 | |||
PG&E Citygate NG-CG-PGE-SNL | 2.34 | 2.82 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.25 | 1.47 | |||
Chicago Citygate NG-CG-CH-SNL | 1.44 | 1.75 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.52 | 1.65 | |||
SoCal Citygate NG-SCL-CGT-SNL | 1.98 | 2.65 | |||
Waha Hub NG-WAH-WTX-SNL | 0.32 | -1.32 | |||
AECO NG-ASH-ALB-SNL | 0.38 | 0.65 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 34.00 | 41.50 | |||
PJM West EL-PK-PJMW-SNL | 30.75 | 43.25 | |||
Ercot North EL-PK-ERTN-SNL | 25.00 | 24.50 | |||
Mid C EL-PK-MIDC-SNL | 38.26 | 38.26 | |||
Palo Verde EL-PK-PLVD-SNL | 31.50 | 31.50 | |||
SP-15 EL-PK-SP15-SNL | 31.00 | 31.00 |
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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