June 3, 2020 / 12:32 PM / a month ago

U.S. natgas futures gain on rising air conditioner use, higher LNG exports

    June 3 (Reuters) - U.S. natural gas futures climbed on Wednesday on forecasts for demand to rise as
consumers crank up their air conditioners and liquefied natural gas exports edge up as gas prices in
Europe rocket higher.
    U.S. LNG exports fell to their lowest in 13 months during the first two days of June after buyers in
April and May canceled cargoes due to record low prices in Europe. Buyers nominate cargoes a month or
two in advance of delivery.
    Over the past three days, however, major European benchmarks soared over
40% with forwards for September at the Title Transfer Facility (TTF) in the Netherlands
trading at a premium over the U.S. Henry Hub benchmark in Louisiana for the first time since late
April.
    Front-month gas futures rose 3.4 cents, or 1.9%, to $1.811 per million British thermal units
at 8:16 a.m. EDT (1216 GMT).
    Looking ahead, futures for the balance of 2020 and calendar 2021 were trading
about 23% and 48% over the front-month, respectively, on hopes the economy will snap back as governments
lift coronavirus-linked travel restrictions.
    Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell to 88.3 billion
cubic feet per day (bcfd) so far in June, down from a one-year low of 89.3 bcfd in May and an all-time
monthly high of 95.4 bcfd in November.
    With the coming of warmer summer weather, Refinitiv projected U.S. demand, including exports, would
rise from 81.0 bcfd this week to 82.0 bcfd next week.
    The amount of pipeline gas flowing to U.S. LNG export plants was on track to reach 4.5 bcfd on
Wednesday up from a 13-month low of 3.8 bcfd earlier in the week. That compares with an eight-month low
of 6.4 bcfd in May and a monthly record high of 8.7 bcfd in February.
        
                                       Week ended      Week ended    Year ago   Five-year   
                                          May 29        May 22        May 29     average    
                                        (Forecast)      (Actual)                  May 29    
 U.S. natgas storage (bcf):                +112           +109         +118        +103     
                                                                                            
                                                                                            
 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                              10             11           17          22           21
 U.S. GFS CDDs                             164            163          127         140          131
 U.S. GFS TDDs                             174            174          144         162          152
                                                                                            
 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              88.3           88.6         88.5        89.9         77.5
 U.S. Imports from Canada                  6.1            6.2          6.6         8.0          7.9
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.1
 Total U.S. Supply                         94.3           94.8         95.1        97.9         85.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.1            2.2          2.3         2.2          1.9
 U.S. Exports to Mexico                    4.8            5.0          4.8         4.8          4.1
 U.S. LNG Exports                          6.0            5.0          4.6         5.2          1.9
 U.S. Commercial                           4.6            4.6          4.5         4.6          4.7
 U.S. Residential                          4.0            4.0          3.8         4.1          4.1
 U.S. Power Plant                          29.5           32.5         34.1        32.0         31.0
 U.S. Industrial                           21.2           21.3         21.4        21.4         20.4
 U.S. Plant Fuel                           4.4            4.4          4.4         4.4          4.5
 U.S. Pipe Distribution                    1.7            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                    65.6           68.8         70.2        68.4         66.7
 Total U.S. Demand                         78.5           81.0         82.0        80.6         74.6
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.58           1.58                              
 Transco Z6 New York NG-CG-NY-SNL        1.52           1.34                              
 PG&E Citygate NG-CG-PGE-SNL             2.59           2.47                              
 Dominion South NG-PCN-APP-SNL           1.44           1.32                              
 Chicago Citygate NG-CG-CH-SNL           1.64           1.54                              
 Algonquin Citygate NG-CG-BS-SNL         1.59           1.45                              
 SoCal Citygate NG-SCL-CGT-SNL           2.44           2.11                              
 Waha Hub NG-WAH-WTX-SNL                 1.49           1.41                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             22.00          19.50                              
 PJM West EL-PK-PJMW-SNL                25.50          21.50                              
 Ercot North EL-PK-ERTN-SNL             28.00          23.00                              
 Mid C EL-PK-MIDC-SNL                   13.39           9.69                              
 Palo Verde EL-PK-PLVD-SNL              48.38          33.25                              
 SP-15 EL-PK-SP15-SNL                   40.50          35.00                              
 
 (Reporting by Scott DiSavino)
  
 
 
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