June 11, 2020 / 2:50 PM / a month ago

UPDATE 2-U.S. natgas up as output slows, despite weaker demand forecast

 (Adds latest prices)
    June 11 (Reuters) - U.S. natural gas futures rose on Thursday as output continues to slow despite
forecasts for demand to decline, lower liquefied natural gas (LNG) exports and a weekly storage build in
line with estimates.
    The U.S. Energy Information Administration (EIA) said utilities injected 93 billion cubic feet of
gas into storage during the week ended June 5.
    That matched analysts' estimates in a Reuters poll and compares with an increase of 107 bcf during
the same week last year and a five-year (2015-19) average build of 94 bcf for the period.

    Front-month gas futures rose 3.3 cents, or 1.9%, to settle at $1.813 per million British
thermal units.
    Looking ahead, futures for the balance of 2020 and calendar 2021 were trading
about 24% and 48% over the front month, respectively, on hopes the economy will snap back as state
governments lift coronavirus-linked travel restrictions.
    Refinitiv said production in the Lower 48 U.S. states fell to an average of 88.5 billion cubic feet
per day so far in June from a one-year low of 89.2 bcfd in May and an all-time monthly high of 95.4 bcfd
in November.
    With milder weather expected in mid-June, Refinitiv forecast U.S. demand, including exports, would
slide from 82.6 bcfd this week to 79.6 bcfd next week.
    The amount of pipeline gas flowing to U.S. LNG export plants fell to an average of 4.2 bcfd (43%
utilization) so far in June, down from an eight-month low of 6.4 bcfd in May and a monthly record high
of 8.7 bcfd in February. Utilization was about 90% in 2019.
    U.S. LNG exports dropped in recent months as buyers canceled dozens of cargoes for the summer with
U.S. gas prices trading mostly higher than in Europe since late April
due to global demand destruction from the coronavirus and record-high European stockpiles.
           
                                       Week ended      Week ended    Year ago   Five-year   
                                           Jun 5        May 29        Jun 5      average    
                                         (Actual)       (Actual)                  Jun 5     
 U.S. natgas storage (bcf):                +93            +102         +107        +94      
                                                                                            
                                                                                            
 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                              8              7            14          14           13
 U.S. GFS CDDs                             183            183          137         158          152
 U.S. GFS TDDs                             191            190          151         172          165
                                                                                            
 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              88.7           88.4         88.6        90.0         77.5
 U.S. Imports from Canada                  6.2            6.0          6.6         7.9          7.9
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         95.0           94.4         95.2        97.9         85.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.2            2.4          2.4         2.5          1.9
 U.S. Exports to Mexico                    5.1            5.4          5.0         5.0          4.1
 U.S. LNG Exports                          5.2            4.0          4.4         5.3          1.9
 U.S. Commercial                           4.6            4.5          4.5         4.6          4.7
 U.S. Residential                          3.9            3.8          3.8         3.9          4.1
 U.S. Power Plant                          32.3           34.8         31.8        31.3         31.0
 U.S. Industrial                           21.3           21.3         21.4        21.3         20.4
 U.S. Plant Fuel                           4.4            4.4          4.4         4.4          4.5
 U.S. Pipe Distribution                    1.8            1.9          1.8         1.8          1.9
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    68.6           70.8         67.8        67.4         66.7
 Total U.S. Demand                         81.1           82.6         79.6        80.2         74.6
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.72           1.68                              
 Transco Z6 New York NG-CG-NY-SNL        1.59           1.58                              
 PG&E Citygate NG-CG-PGE-SNL             2.55           2.48                              
 Dominion South NG-PCN-APP-SNL           1.47           1.46                              
 Chicago Citygate NG-CG-CH-SNL           1.60           1.62                              
 Algonquin Citygate NG-CG-BS-SNL         1.67           1.65                              
 SoCal Citygate NG-SCL-CGT-SNL           2.24           2.16                              
 Waha Hub NG-WAH-WTX-SNL                 1.42           1.28                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             20.75          21.25                              
 PJM West EL-PK-PJMW-SNL                24.75          26.25                              
 Ercot North EL-PK-ERTN-SNL             19.50          25.25                              
 Mid C EL-PK-MIDC-SNL                   15.50          20.75                              
 Palo Verde EL-PK-PLVD-SNL              24.75          23.25                              
 SP-15 EL-PK-SP15-SNL                   27.00          23.75                              
 
 (Reporting by Scott DiSavino;
Editing by Nick Zieminski, Dan Grebler and Sonya Hepinstall)
  
 
 
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