July 1, 2020 / 7:07 PM / a month ago

UPDATE 1-U.S. natgas breaks 3-day win streak as virus cases resurge

 (Adds comments, updates prices)
    July 1 (Reuters) - U.S. natural gas futures on Wednesday snapped a three-session gaining streak as
concerns about another lockdown due to surging coronavirus infections clouded demand outlook.
    The August gas futures contract fell 8 cents, or 4.6%, to settle at $1.671 per million
British thermal units, having hit its highest since June 12 in the last session.
    The front-month contract also posted its biggest quarterly rise since June 2018 on Tuesday.
    "We are seeing some investors walking away with profit as concerns of another wave of coronavirus is
resurfacing on the horizon," said Raymond James analyst Muhammed Ghulam.
    Increases in infection have fueled concerns of another lockdown, which could lead to closure of
offices and factories, in turn reducing the demand for electricity and cooling, Ghulam added. 
     New U.S. COVID-19 cases rose by more than 47,000 on Tuesday, according to a Reuters tally, the
biggest one-day spike since the start of the pandemic, as the government's top infectious disease
expert, Dr. Anthony Fauci, warned that number could soon double.
    Prolonged lockdowns to curb the spread of the coronavirus have kept many businesses shut, cutting
U.S. LNG exports by half since the start of the year with stockpiles filling fast, expected to reach a
record 4.1 trillion cubic feet by the end of October.
    "The expected end of season higher storage level is the most significant factor that keeps a lid on
gas prices at this point," said Zhen Zhu, economist at Oklahoma City-based C.H. Guernsey.
    However, "several factors are still providing some support to prices: summer weather uncertainty
(more on the warmer than normal side), possible damaging tropical storms, and expected gas lower
production for this year." 
    Weather forecasts pointed toward a warm summer with Refinitiv data indicating 248 cooling degree
days (CDDs) in the Lower 48 states over the next two weeks. The normal is 193 CDDs for this time of
year.
    
    
                                       Week ended      Week ended    Year ago   Five-year   
                                          June 26       June 19      June 26     average    
                                        (Forecast)      (Actual)                 June 26    
 U.S. natgas storage (bcf):                +79            +120         +92         +65      
                                                                                            
                                                                                            
 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                              2              2            3           4            4
 U.S. GFS CDDs                             248            243          219         202          193
 U.S. GFS TDDs                             250            245          222         206          197
                                                                                            
 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts                                      
                                        Prior Week    Current Week  Next Week                     
 U.S. Supply (bcfd)                                                                               
                                                                                            
 U.S. Lower 48 Dry Production              87.3           87.1         87.0                       
 U.S. Imports from Canada                  6.5            6.4          6.7                        
 U.S. LNG Imports                          0.0            0.0          0.0                        
 Total U.S. Supply                         93.7           93.5         93.7                       
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.3            2.4          2.4                        
 U.S. Exports to Mexico                    5.5            5.3          5.4                        
 U.S. LNG Exports                          4.1            4.1          3.3                        
 U.S. Commercial                           4.4            4.3          4.3                        
 U.S. Residential                          3.5            3.5          3.5                        
 U.S. Power Plant                          37.3           39.1         43.1                       
 U.S. Industrial                           21.3           21.3         21.3                       
 U.S. Plant Fuel                           4.3            4.3          4.3                        
 U.S. Pipe Distribution                    1.9            2.0          2.1                        
 U.S. Vehicle Fuel                         0.1            0.1          0.1                        
 Total U.S. Consumption                    72.9           74.6         78.8                       
 Total U.S. Demand                         84.9           86.5         89.9                       
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.76           1.67                              
 Transco Z6 New York NG-CG-NY-SNL        1.55           1.62                              
 PG&E Citygate NG-CG-PGE-SNL             2.20           2.19                              
 Dominion South NG-PCN-APP-SNL           1.46           1.51                              
 Chicago Citygate NG-CG-CH-SNL           1.66           1.64                              
 Algonquin Citygate NG-CG-BS-SNL         1.65           1.60                              
 SoCal Citygate NG-SCL-CGT-SNL           1.65           1.80                              
 Waha Hub NG-WAH-WTX-SNL                 1.39           1.28                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             21.00          21.50                              
 PJM West EL-PK-PJMW-SNL                23.75          25.00                              
 Ercot North EL-PK-ERTN-SNL             35.50          21.00                              
 Mid C EL-PK-MIDC-SNL                    2.05           0.25                              
 Palo Verde EL-PK-PLVD-SNL              22.25          21.50                              
 SP-15 EL-PK-SP15-SNL                   22.75          21.50                              
 


 (Reporting by Diptendu Lahiri and Swati Verma in Bengaluru; editing by Jonathan Oatis)
  
 
 
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