U.S. natgas jumps 4% as soaring global prices keep LNG exports strong

Nov 23 (Reuters) – U.S. natural gas futures jumped about 4% on Tuesday, erasing most of Monday’s 5% drop, as soaring global gas prices keep demand for U.S. liquefied natural gas (LNG) exports near record highs. Gas prices in Europe soared about 6% on Tuesday as colder weather increased demand and the market remained nervous about winter supplies from Russia. In recent months, global gas prices hit record highs as utilities around the world scrambled for LNG cargoes to replenish extremely low stockpiles in Europe and meet insatiable demand in Asia, where energy shortfalls have caused power blackouts in China. Following those global gas prices, U.S. futures jumped to a 12-year high in early October, but have since pulled back because the United States has plenty of gas in storage and ample production for the winter. Overseas prices continue to trade about six times higher than U.S. futures. Analysts have said European inventories were about 17% below normal for this time of year, compared with just 2% below normal in the United States. U.S. front-month gas futures were up 20.3 cents, or 4.2%, to $4.992 per million British thermal units (mmBtu) at 7:54 a.m. EST (1254 GMT). On Monday, the contract settled at its lowest since Sept. 7. In the spot market, gas prices for Tuesday in New York <NG-CG-NY-SNL> and New England <NG-CG-BS-SNL> jumped to their highest since the February freeze as temperatures in the U.S. Northeast dropped and homes and businesses cranked up their heaters. The February freeze cut U.S. gas production and left millions of consumers without power and heat for days in Texas and other Central U.S. states. High temperatures in Boston, the biggest city in New England, were only expected to reach about 43 degrees Fahrenheit (6 Celsius) on Tuesday and Wednesday, according to meteorologists at AccuWeather. That compares with a normal high of 49 degrees at this time of year. Data provider Refinitiv said output in the U.S. Lower 48 states averaged 96.1 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October and a monthly record of 95.4 bcfd in November 2019. Refinitiv projected average U.S. gas demand, including exports, would rise from 111.2 bcfd this week to 112.6 bcfd next week as the weather turns seasonally colder and homes and businesses crank up their heaters. The forecast for next week, however, was lower than Refinitiv’s forecast on Monday. The amount of gas flowing to U.S. LNG export plants has averaged 11.2 bcfd so far in November, up from 10.5 bcfd in October as the sixth train at Cheniere Energy Inc’s Sabine Pass plant in Louisiana started producing LNG in test mode. That compares with a monthly record of 11.5 bcfd in April. With gas prices around $29 per mmBtu in Europe and $34 in Asia, compared with about $5 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States can produce. Week ended Week ended Year ago Five-year Nov 19 Nov 12 Nov 19 average (Forecast) (Actual) Nov 19 U.S. weekly natgas storage change (bcf): -21 26 -11 -44 U.S. total natgas in storage (bcf): 3,620 3,643 3,943 3,681 U.S. total storage versus 5-year average -1.7% -2.2% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2020 (2016-2020) Henry Hub 4.97 4.79 2.87 2.13 2.66 Title Transfer Facility (TTF) 29.49 27.99 4.84 3.24 5.19 Japan Korea Marker (JKM) 33.97 34.26 6.80 4.22 6.49 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 316 319 316 337 341 U.S. GFS CDDs 4 3 6 7 7 U.S. GFS TDDs 320 322 322 344 348 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 95.6 96.5 96.8 92.4 84.6 U.S. Imports from Canada 8.0 8.4 8.6 7.7 8.0 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2 Total U.S. Supply 103.6 104.9 105.4 100.1 92.8 U.S. Demand (bcfd) U.S. Exports to Canada 3.3 3.0 3.1 2.6 2.7 U.S. Exports to Mexico 5.4 5.3 5.6 5.6 4.9 U.S. LNG Exports 11.1 11.6 11.5 9.8 4.6 U.S. Commercial 11.6 13.4 13.8 11.4 11.1 U.S. Residential 17.3 21.1 21.8 17.4 16.5 U.S. Power Plant 25.8 25.7 25.6 24.3 24.5 U.S. Industrial 23.4 23.8 23.9 23.6 23.5 U.S. Plant Fuel 4.7 4.8 4.8 4.8 4.7 U.S. Pipe Distribution 2.3 2.4 2.5 2.4 2.1 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 85.2 91.2 92.5 84.0 82.5 Total U.S. Demand 105.0 111.2 112.6 102.0 94.7 U.S. weekly power generation percent by fuel – EIA Week ended Week ended Week ended Week ended Week ended Nov 26 Nov 19 Nov 12 Nov 5 Oct 29 Wind 12 14 14 9 14 Solar 2 2 2 3 3 Hydro 6 6 6 6 6 Other 2 2 2 2 2 Petroleum 1 1 1 1 1 Natural Gas 35 35 35 40 38 Coal 20 19 19 19 18 Nuclear 22 21 21 19 19 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub <NG-W-HH-SNL> 4.83 4.90 Transco Z6 New York <NG-CG-NY-SNL> 7.38 4.80 PG&E Citygate <NG-CG-PGE-SNL> 5.79 6.12 Dominion South <NG-PCN-APP-SNL> 4.39 4.52 Chicago Citygate <NG-CG-CH-SNL> 4.63 4.89 Algonquin Citygate <NG-CG-BS-SNL> 9.50 4.88 SoCal Citygate <NG-SCL-CGT-SNL> 5.60 6.95 Waha Hub <NG-WAH-WTX-SNL> 4.15 4.50 AECO <NG-ASH-ALB-SNL> 3.20 3.25 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England <EL-PK-NPMS-SNL> 77.75 56.25 PJM West <EL-PK-PJMW-SNL> 40.50 46.00 Ercot North <EL-PK-ERTN-SNL> 35.00 46.00 Mid C <EL-PK-MIDC-SNL> 42.00 57.00 Palo Verde <EL-PK-PLVD-SNL> 14.00 35.25 SP-15 <EL-PK-SP15-SNL> 53.00 54.75 (Reporting by Scott DiSavino Editing by Mark Potter)

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