March 12, 2020 / 3:03 PM / 17 days ago

UPDATE 2-U.S. natgas futures slip with oil decline and small storage draw

 (Adds closing prices)
    March 12 (Reuters) - U.S. natural gas futures fell 2% on Thursday with a 5% drop in oil prices and a
smaller-than-expected storage draw last week.
    Traders noted the gas decline was limited by forecasts for cooler U.S. weather and higher heating
demand over the next two weeks than earlier expected and expectations the oil price drop this week would
cut crude and associated gas production in shale basins, allowing gas demand to absorb some of the supply
glut that has built up in recent years.
    The U.S. Energy Information Administration (EIA) said utilities pulled 48 billion cubic feet (bcf) of
gas from storage during the week ended March 6.
    That was lower than the 59-bcf decline analysts expected in a Reuters poll and compares with a drop
of 164 bcf during the same week last year and a five-year (2015-19) average reduction of 99 bcf for the
period.
    The decrease for the week ended March 6 cut stockpiles to 2.043 trillion cubic feet (tcf), 12.5%
above the five-year average of 1.816 tcf for this time of year.
    Front-month gas futures for April delivery on the New York Mercantile Exchange fell 3.7 cents,
or 2.0%, to settle at $1.841 per million British thermal units (mmBtu).
    U.S. oil prices fell about 5% on Thursday after U.S. President Donald Trump restricted travel from
continental Europe, among measures to halt the spread of the coronavirus after the World Health
Organization described the outbreak as a pandemic.
    Over the past few months, gas prices have fallen 37% since hitting an eight-month high of $2.905 per
mmBtu in early November because near-record production and mild winter weather enabled utilities to leave
more gas in storage, making fuel shortages and price spikes unlikely.
    Data provider Refinitiv projected average gas demand in the U.S. Lower 48 states, including exports,
would edge up from 101.4 billion cubic feet per day (bcfd) this week to 104.5 bcfd next week. That is
higher than Refinitiv's forecast on Wednesday of 100.8 bcfd this week and 102.3 bcfd next week.
    The amount of gas flowing to U.S. LNG export plants was on track to rise to 8.4 bcfd on Thursday from
8.3 bcfd on Wednesday, according to preliminary data from Refinitiv. That compares with an average of 7.8
bcfd last week and an all-time daily high of 9.5 bcfd on Jan. 31.
    U.S. production, meanwhile, edged up to 93.7 bcfd on Wednesday from 93.6 bcfd on Tuesday, according
to Refinitiv. That compares with an average of 93.7 bcfd last week and an all-time daily high of 96.6
bcfd on Nov. 30.
         
                                        Week ended     Week ended    Year ago    Five-year   
                                         March 6        Feb. 28      March 6      average    
                                         (Actual)       (Actual)                  March 6    
 U.S. natgas storage (bcf):                -48            -109         -164         -99      
                                                                                             
                                                                                             
 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                             234            237          293          280          278
 U.S. GFS CDDs                              28             26           10          14            11
 U.S. GFS TDDs                             262            263          370          294          289
                                                                                             
 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              93.9           93.7         93.7        88.5          76.9
 U.S. Imports from Canada                  7.1            6.6          7.3          8.6          8.5
 U.S. LNG Imports                          0.1            0.1          0.0          0.1          0.2
 Total U.S. Supply                        101.2          100.4        100.9        97.2          85.6
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.8            3.0          3.0          3.1          2.6
 U.S. Exports to Mexico                    5.6            5.6          5.6          4.8          3.8
 U.S. LNG Exports                          8.1            8.0          8.6          5.1          1.8
 U.S. Commercial                           13.2           10.8         11.5        13.4          12.3
 U.S. Residential                          20.5           16.0         17.4        21.7          19.4
 U.S. Power Plant                          28.7           27.8         27.7        25.1          23.7
 U.S. Industrial                           23.8           23.1         23.3        23.4          22.6
 U.S. Plant Fuel                           4.6            4.6          4.6          4.6          4.7
 U.S. Pipe Distribution                    2.5            2.3          2.3          2.3          2.5
 U.S. Vehicle Fuel                         0.1            0.1          0.1          0.1          0.1
 Total U.S. Consumption                    93.4           84.8         87.0        90.6          85.3
 Total U.S. Demand                        109.9          101.4        104.3        103.6         93.5
                                                                                             
                                                                                             
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                          
 Hub                                   Current Day     Prior Day                             
 Henry Hub NG-W-HH-SNL                   1.96           1.91                               
 Transco Z6 New York NG-CG-NY-SNL        1.70           1.56                               
 PG&E Citygate NG-CG-PGE-SNL             2.84           2.62                               
 Dominion South NG-PCN-APP-SNL           1.52           1.49                               
 Chicago Citygate NG-CG-CH-SNL           1.77           1.69                               
 Algonquin Citygate NG-CG-BS-SNL         1.74           1.65                               
 SoCal Citygate NG-SCL-CGT-SNL           2.40           2.25                               
 Waha Hub NG-WAH-WTX-SNL                 1.15           0.93                               
                                                                                             
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                        
 Hub                                   Current Day     Prior Day                             
 New England EL-PK-NPMS-SNL             21.25          19.00                               
 PJM West EL-PK-PJMW-SNL                23.00          23.18                               
 Ercot North EL-PK-ERTN-SNL             29.50          26.00                               
 Mid C EL-PK-MIDC-SNL                   23.75          23.38                               
 Palo Verde EL-PK-PLVD-SNL              27.75          27.75                               
 SP-15 EL-PK-SP15-SNL                   30.75          32.75                               
 
 (Reporting by Scott DiSavino; Editing by Bernadette Baum, Alistair Bell and Jonathan Oatis)
  
 
 
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