U.S. natgas futures rise 3% on colder weather forecasts – Yahoo Finance

Dec 7 (Reuters) – U.S. natural gas futures rose about 3% on Wednesday on forecasts of colder weather and higher heating demand over the next two weeks than previously expected. That colder weather should force utilities to pull more gas from storage. Gas stockpiles were about 2.4% below the five-year (2017-2021) average for this time of year. Gas futures rose despite Freeport LNG's announcement last week that it expects to delay the restart of its liquefied natural gas export plant in Texas from mid-December to the end of the year. Some analysts, however, do not expect Freeport to return until January, February or even later as it will likely take federal pipeline safety regulators longer than Freeport thinks to review and approve the plant's restart plan once the company submits it. At least one LNG vessel – Prism Brilliance – gave up on Freeport after the company delayed the planned restart last week, according to ship tracking data from Refinitiv. The ship is now on its way to Jamaica. But, a couple of ships – Prism Diversity and Prism Courage – were still waiting in the Gulf of Mexico to pick up LNG from Freeport. The plant, which can turn about 2.1 billion cubic feet per day (bcfd) of gas into LNG, shut on June 8 due to an explosion caused by inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired by the company to review the incident and suggest corrective actions. Front-month gas futures for January delivery on the New York Mercantile Exchange rose 18.4 cents, or 3.4%, to $5.653 per million British thermal units (mmBtu) at 8:04 a.m. EST (1304 GMT). On Tuesday, the contract closed at its lowest since Oct. 27 for a second day in a row. U.S. gas futures were up about 53% so far this year as much higher global prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine. Gas was trading at $44 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $33 at the Japan Korea Marker (JKM) in Asia. TOP PRODUCER U.S. gas futures lag global prices because the United States is the world's top producer with all the fuel it needs for domestic use, while capacity constraints and the Freeport outage have prevented the country from exporting more LNG. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.6 bcfd so far in December, up from a monthly record of 99.5 bcfd in November. With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 118.0 bcfd this week to 121.3 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Tuesday. The average amount of gas flowing to U.S. LNG export plants held around 11.8 bcfd so far in December, the same as in November. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. During the first 11 months of 2022, roughly 67%, or 7.1 bcfd, of U.S. LNG exports went to Europe as shippers diverted cargoes from Asia to get higher prices. Last year, just 29%, or about 2.8 bcfd, of U.S. LNG exports went to Europe. Russia, the world's second-biggest gas producer, provided about a third of Europe's gas in recent years, totaling about 18.3 bcfd in 2021. The European Union, however, wants to cut Russian gas imports by two-thirds by 2022 end and refill stockpiles to 80% of capacity by Nov. 1 and 90% by Nov. 1 each year from 2023. Week ended Week ended Year ago Five-year Dec 2 Nov 25 Dec 2 average (Forecast) (Actual) Dec 2 U.S. weekly natgas storage change (bcf): -40 -81 -59 -49 U.S. total natgas in storage (bcf): 3,443 3,483 3,513 3,520 U.S. total storage versus 5-year average -2.2% -2.4% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 5.68 5.47 3.86 3.73 2.89 Title Transfer Facility (TTF) 43.43 43.26 37.67 16.04 7.49 Japan Korea Marker (JKM) 32.85 33.19 37.84 18.00 8.95 Refinitiv 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 380 346 317 370 395 U.S. GFS CDDs 9 10 15 5 4 U.S. GFS TDDs 389 356 332 375 399 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Week Next Week This Week Five-Year Last Year Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 100.1 99.7 100.1 95.7 89.8 U.S. Imports from Canada 8.5 8.3 9.0 9.4 8.9 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.3 Total U.S. Supply 108.6 108.0 109.1 105.1 99.0 U.S. Demand (bcfd) U.S. Exports to Canada 3.4 3.2 3.2 3.5 3.2 U.S. Exports to Mexico 5.6 5.5 5.6 5.7 5.0 U.S. LNG Exports 11.8 11.6 12.0 12.0 6.9 U.S. Commercial 13.6 13.4 14.3 13.9 14.6 U.S. Residential 22.1 21.5 23.5 22.1 24.6 U.S. Power Plant 27.1 31.2 30.8 29.2 27.3 U.S. Industrial 24.3 24.0 24.2 23.9 24.9 U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9 U.S. Pipe Distribution 2.5 2.6 2.7 2.6 2.5 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 94.7 97.7 100.5 96.7 98.9 Total U.S. Demand 115.7 118.0 121.3 117.9 114.0 U.S. weekly power generation percent by fuel – EIA Week ended Week ended Week ended Week ended Week ended Dec 9 Dec 2 Nov 25 Nov 18 Nov 11 Wind 12 15 9 9 15 Solar 2 2 2 3 3 Hydro 6 6 6 7 6 Other 2 2 2 2 3 Petroleum 0 0 0 0 0 Natural Gas 37 35 39 41 38 Coal 20 19 20 18 16 Nuclear 21 21 20 20 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 4.58 4.15 Transco Z6 New York 3.95 4.00 PG&E Citygate 17.84 16.95 Dominion South 3.77 3.70 Chicago Citygate 4.28 4.36 Algonquin Citygate 4.02 4.24 SoCal Citygate 17.75 19.00 Waha Hub 1.38 0.63 AECO 3.91 3.82 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 51.50 51.25 PJM West 55.75 58.75 Ercot North 44.50 40.00 Mid C 152.50 160.00 Palo Verde 133.50 155.50 SP-15 143.50 158.75 (Reporting by Scott DiSavino; Editing by Arun Koyyur)
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