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US natural gas prices ease 1% as mild weather forecasts keep heating demand low



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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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