(Adds latest prices)
April 14 (Reuters) - U.S. natural gas futures fell over 4% on Tuesday as the market focused more on
projections that steps to slow the coronavirus spread will cut future demand rather than short-term
forecasts for cooler weather and higher heating use over the next two weeks.
Front-month gas futures for May delivery on the New York Mercantile Exchange fell 7.4 cents,
or 4.3%, to settle at $1.650 per million British thermal units, their lowest close in over a week.
That puts the front-month down for a fourth day in a row for the first time since February. During
that time, the contract has lost about 11%.
Even before the coronavirus started to cut global economic growth and energy demand, gas was trading
near its lowest in years as record production and months of mild winter weather allowed utilities to
leave more fuel in storage, making shortages and price spikes unlikely. During the first week of April,
the front-month settled at its lowest since August 1995.
Looking ahead, however, gas futures for the balance of 2020 and calendar 2021
were trading much higher than the front month on expectations demand will jump in coming months as the
economy recovers once governments loosen travel and work restrictions after slowing the spread of the
coronavirus.
Along those lines, the premium of futures for June over May rose to its highest since
2008 when the contracts started trading, while calendar 2021 has traded over 2022 for
24 days and over 2025 for 14 days.
The U.S. Energy Information Administration (EIA) projected the coronavirus would cut U.S. gas
consumption to 83.79 billion cubic feet per day (bcfd) in 2020 and 81.24 bcfd in 2021 from a record 84.97
bcfd in 2019 as offices close and factories run at lower capacities. That would be the first annual
decline in consumption since 2017 and the first time demand will have fallen for two consecutive years
since 2006.
But with cooler weather coming in the short-term, data provider Refinitiv projected gas demand in the
U.S. Lower 48 states, including exports, would reach 97.6 bcfd this week and 95.0 bcfd next week. That is
higher than Refinitiv's forecasts on Monday of 97.3 bcfd this week and 94.3 bcfd next week.
The amount of gas flowing to U.S. liquefied natural gas export plants, meanwhile, rose to 8.7 bcfd on
Monday from 7.8 bcfd on Sunday, according to Refinitiv. That compares with an average of 8.0 bcfd last
week and an all-time daily high of 9.5 bcfd on Jan. 31.
U.S. pipeline exports to Mexico fell to a 10-week low of 5.2 bcfd on Monday from 5.3 bcfd on Sunday,
according to Refinitiv. That compares with an average of 5.4 bcfd last week and an all-time high of 5.8
bcfd on Oct. 17.
Week ended Week ended Year ago Five-year
April 3 March 27 April 3 average
(Actual) (Actual) April 3
U.S. natgas storage (bcf): +38 -19 +25 +6 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 186 189 124 141 144
U.S. GFS CDDs 37 33 31 38 32
U.S. GFS TDDs 223 222 155 179 176
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 93.1 93.3 93.5 89.8 77.2
U.S. Imports from Canada 5.8 6.3 6.6 7.9 8.1
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 98.8 99.6 100.0 97.7 85.4
U.S. Demand (bcfd)
U.S. Exports to Canada 2.5 2.4 2.4 2.6 2.3
U.S. Exports to Mexico 4.6 4.6 5.2 4.4 3.7
U.S. LNG Exports 8.0 8.4 9.1 4.9 1.8
U.S. Commercial 8.5 10.2 9.2 7.9 8.2
U.S. Residential 11.8 14.6 12.9 10.5 11.3
U.S. Power Plant 28.3 27.0 26.7 25.0 21.5
U.S. Industrial 22.5 23.4 22.8 22.3 23.0
U.S. Plant Fuel 4.6 4.6 4.6 4.6 4.6
U.S. Pipe Distribution 2.1 2.2 2.1 2.1 2.2
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 77.9 82.2 78.4 72.5 70.9
Total U.S. Demand 93.0 97.6 95.0 84.4 78.7 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 1.86 1.74
Transco Z6 New York 1.50 1.30
PG&E Citygate 2.38 2.34
Dominion South 1.44 1.29
Chicago Citygate 1.79 1.65
Algonquin Citygate 1.50 1.46
SoCal Citygate 1.82 1.61
Waha Hub 0.36 0.06 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 16.25 15.75
PJM West 19.50 20.75
Ercot North 25.25 16.50
Mid C 16.50 25.75
Palo Verde 14.50 9.25
SP-15 15.50 10.50
(Reporting by Scott DiSavino
Editing by Nick Zieminski)
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