(Adds closing prices) May 7 (Reuters) - U.S. natural gas futures fell almost 3% on Thursday on a much bigger-than-usual weekly storage build that analysts said was caused by coronavirus-related demand destruction. "The larger than expected build suggests ... lost demand is still overwhelming the market," said Daniel Myers, market analyst at Gelber & Associates in Houston, noting gas use will remain low so long as the economy remains shuttered by government lockdowns. The U.S. Energy Information Administration (EIA) said utilities injected 109 billion cubic feet (bcf) of gas into storage during the week ended May 1. That was slightly bigger than the 106-bcf build analysts forecast in a Reuters poll and compares with an increase of 96 bcf during the same week last year and a five-year (2015-19) average build of 74 bcf for the period. The increase last week boosted stockpiles to 2.319 trillion cubic feet (tcf), 20.5% above the five-year average of 1.924 tcf for this time of year. Front-month gas futures for June delivery on the New York Mercantile Exchange fell 5.0 cents, or 2.6%, to settle at $1.894 per million British thermal units. This has been a volatile week for U.S. gas. Prices jumped to a 16-week high on Tuesday after a big pipe shut and on slowing output, but fell almost 9% on Wednesday, the biggest percentage decline in over a year, after the market failed to break above the 200-day moving average and on more signs government lockdowns have cut demand and exports. That price increase on Tuesday briefly made the U.S. front-month the most expensive of the world's major gas benchmarks for the first time ever, ahead of the Title Transfer Facility (TTF) in the Netherlands and the Japan/Korea Marker (JKM), both of which are trading near record lows. Analysts said high U.S. gas prices and low prices elsewhere in the world could prompt buyers of U.S. liquefied natural gas (LNG) to cancel more cargoes in coming months. Looking ahead, U.S. gas futures for the balance of 2020 and calendar 2021 are trading higher than the front-month on expectations demand will jump once governments loosen travel and work restrictions. Data provider Refinitiv said average gas output in the U.S. Lower 48 states has fallen to 90.0 bcfd so far in May, down from an eight-month low of 92.8 bcfd in April and an all-time monthly high of 95.4 bcfd in November. With even cooler weather coming, Refinitiv projected demand in the Lower 48, including exports, would rise from an average of 83.7 bcfd this week to 87.6 bcfd next week. That is higher than Refinitiv's forecasts on Wednesday of 82.9 bcfd this week and 85.4 bcfd next week. Refinitiv said U.S. LNG exports have averaged 7.0 bcfd so far in May, down from a four-month low of 8.1 bcfd in April and an all-time high of 8.7 bcfd in February. Week ended Week ended Year ago Five-year May 1 Apr 24 May 1 average (Actual) (Actual) May 1 U.S. natgas storage (bcf): +109 +70 +96 +74 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 101 101 87 81 72 U.S. GFS CDDs 70 66 59 67 68 U.S. GFS TDDs 171 167 146 128 140 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 91.9 90.0 89.7 88.9 77.0 U.S. Imports from Canada 5.9 5.9 6.3 7.7 7.8 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 97.8 95.9 96.0 96.6 84.9 U.S. Demand (bcfd) U.S. Exports to Canada 2.8 2.5 2.5 2.5 1.9 U.S. Exports to Mexico 4.7 4.4 4.5 4.5 3.9 U.S. LNG Exports 7.5 7.3 7.5 5.5 2.0 U.S. Commercial 7.3 6.6 8.1 6.1 5.5 U.S. Residential 9.2 7.8 10.6 6.9 6.1 U.S. Power Plant 26.1 26.4 25.2 26.4 25.3 U.S. Industrial 22.2 22.1 22.7 21.9 20.6 U.S. Plant Fuel 4.5 4.4 4.4 4.5 4.5 U.S. Pipe Distribution 1.9 1.8 1.9 1.8 1.9 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 71.5 69.4 73.1 67.7 64.0 Total U.S. Demand 86.4 83.7 87.6 80.2 71.8 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub1.90 1.93 Transco Z6 New York 1.44 1.63 PG&E Citygate 2.86 2.95 Dominion South 1.42 1.49 Chicago Citygate 1.89 1.97 Algonquin Citygate 1.60 1.76 SoCal Citygate 2.30 2.23 Waha Hub 1.76 1.77 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 18.75 20.00 PJM West 25.00 23.48 Ercot North 16.50 22.00 Mid C 18.50 16.64 Palo Verde 27.25 20.00 SP-15 29.00 21.75 (Reporting by Scott DiSavino Editing by Nick Zieminski and Jonathan Oatis)
Our Standards: The Thomson Reuters Trust Principles.