March 18, 2020 / 2:34 PM / 19 days ago

U.S. natgas futures fall nearly 5% as coronavirus cuts global demand outlook

    March 18 (Reuters) - U.S. natural gas futures fell almost 5%
on Wednesday alongside a 10% collapse in oil prices, putting the
gas contract on track for its lowest close since 2016, as travel
bans and social lockdowns sparked by the coronavirus slashed the
outlook for global energy demand.
    Front-month gas futures for April delivery on the New
York Mercantile Exchange fell 8.2 cents, or 4.7%, to $1.647 per
million British thermal units (mmBtu) at 10:10 a.m. EDT (1410
GMT). If the contract closes at its current level it would be
its lowest settle since March 2016 and just a couple of cents
over its lowest since February 1999.
    Oil prices, meanwhile, fell for a third session, with U.S.
crude futures tumbling to an 18-year low.
    Even before the coronavirus started to spread, gas prices
were already trading near their lowest in years as near-record
production and months of mild weather enabled utilities to leave
more gas in storage, making fuel shortages and price spikes
unlikely this winter.
    Gas futures were currently trading about 43% below the
eight-month high of $2.905 per mmBtu they hit in early November.
    Looking ahead, however, gas futures for much of 2021 were
trading positive on expectations that economic growth will
return and low energy prices will boost demand.
    Futures for calendar 2021 traded above 2022
 for a fourth session in a row for the first time
since May 2019, while the premium of November 2020 futures over
October NGV20-X20, a bet on the weather next winter, rose to
its highest since November 2010.
    Data provider Refinitiv projected gas demand in the U.S.
Lower 48 states, including exports, would rise from an average
of 104.4 billion cubic feet per day (bcfd) this week to 105.3
bcfd next week. That is lower than Refinitiv's forecasts on
Tuesday of 104.7 bcfd for this week and 106.8 bcfd for next week
due to milder weather forecasts than earlier expected.
    The amount of gas flowing to U.S. liquefied natural gas
(LNG) export plants was on track to rise to 8.3 bcfd on
Wednesday from 8.0 bcfd on Tuesday, 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.
    Gas production in the Lower 48 states slipped to 93.9 bcfd
on Tuesday from 94.5 bcfd on Monday, according to Refinitiv.
That compares with an average of 93.9 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 13       March 6      March 13     average    
                                        (Forecast)      (Actual)                 March 13    
 U.S. natgas storage (bcf):                -12            -48          -91          -63      
                                                                                             
                                                                                             
 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                             237            261          263          250          254
 U.S. GFS CDDs                              25             21           7           17            13
 U.S. GFS TDDs                             262            282          370          267          267
                                                                                             
 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              93.7           94.2         94.3        88.9          76.9
 U.S. Imports from Canada                  6.6            6.9          7.2          8.6          8.5
 U.S. LNG Imports                          0.1            0.0          0.0          0.0          0.2
 Total U.S. Supply                        100.5          101.1        101.4        97.5          85.6
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    3.0            2.8          2.8          2.8          2.6
 U.S. Exports to Mexico                    5.6            5.6          5.6          4.8          3.8
 U.S. LNG Exports                          8.0            8.1          8.5          5.4          1.8
 U.S. Commercial                           10.9           11.1         11.5        12.4          12.3
 U.S. Residential                          16.2           16.7         17.5        19.2          19.4
 U.S. Power Plant                          27.9           29.7         28.6        26.1          23.7
 U.S. Industrial                           23.1           23.2         23.5        23.6          22.6
 U.S. Plant Fuel                           4.6            4.7          4.7          4.7          4.7
 U.S. Pipe Distribution                    2.3            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                    85.0           87.9         88.3        88.4          85.3
 Total U.S. Demand                        101.6          104.4        105.3        101.4         93.5
                                                                                             
                                                                                             
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                          
 Hub                                   Current Day     Prior Day                             
 Henry Hub NG-W-HH-SNL                   1.89           1.89                               
 Transco Z6 New York NG-CG-NY-SNL        1.46           1.46                               
 PG&E Citygate NG-CG-PGE-SNL             2.84           2.81                               
 Dominion South NG-PCN-APP-SNL           1.38           1.40                               
 Chicago Citygate NG-CG-CH-SNL           1.65           1.70                               
 Algonquin Citygate NG-CG-BS-SNL         1.60           1.66                               
 SoCal Citygate NG-SCL-CGT-SNL           2.50           2.61                               
 Waha Hub NG-WAH-WTX-SNL                 0.83           0.79                               
                                                                                             
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                        
 Hub                                   Current Day     Prior Day                             
 New England EL-PK-NPMS-SNL             18.25          21.25                               
 PJM West EL-PK-PJMW-SNL                24.75          26.00                               
 Ercot North EL-PK-ERTN-SNL             26.25          30.00                               
 Mid C EL-PK-MIDC-SNL                   35.50          34.75                               
 Palo Verde EL-PK-PLVD-SNL              33.00          30.25                               
 SP-15 EL-PK-SP15-SNL                   31.50          31.50                               
 
 (Reporting by Scott DiSavino)
  
 
 
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