International
U.S. natgas futures rise ahead of weekly storage report
U.S. natural gas futures on Thursday edged up from a one-month low in the prior session ahead of a storage report expected to show a smaller than usual build last week. Analysts said utilities likely added just 37 billion cubic feet (bcf) of gas into storage during the week ended July 19. That compares with an increase of 27 bcf during the same week last year and a five-year (2014-18) average build of 44 bcf for the period. If correct, the increase would boost stockpiles to 2.570 trillion cubic feet (tcf), 5.5% below the five-year average of 2.720 tcf for this time of year. The amount of gas in inventory has remained below the five-year average since September 2017. It fell as low as 33% below that average in March 2019. With production near record highs, analysts expect stockpiles will reach a near-normal 3.7 tcf by the end of the summer injection season on Oct. 31. The U.S. Energy Information Administration will release its weekly storage report at 10:30 a.m. EDT (1430 GMT) on Thursday. Front-month gas futures for August delivery on the New York Mercantile Exchange were up 2.1 cents, or 1.0%, to $2.241 per million British thermal units (mmBtu) at 8:28 a.m. EDT. On Wednesday, the contract fell to within a few cents of its $2.185 close on June 20, which was its lowest settle since May 2016. Meteorologists stuck to their predictions that temperatures would remain near normal this week before turning a little warmer next week. Data provider Refinitiv projected demand in the lower 48 U.S. states would rise from 89.5 billion cubic feet per day (bcfd) this week to 90.2 bcfd next week as power generators burn a little more gas to meet higher air conditioning use. Those forecasts are similar to Refinitiv’s projections on Wednesday. That keeps the power sector on track to burn more than 40 bcfd of gas on average this month, which would break its monthly record of 39.9 bcfd set in July 2018, according to federal energy projections. Since Tropical Storm Barry hit the central Louisiana coast on July 13, energy firms have been returning Gulf of Mexico wells and platforms to service. Gas production from the offshore Gulf of Mexico was expected to rise to 2.8 bcfd on Thursday from 2.7 bcfd on Tuesday and Wednesday, according to Refinitiv. That compares with a low of a low of 1.2 bcfd from July 13-15 in the days after the storm hit. Before the storm, output was as high as 3.1 bcfd during the first week of July. Despite the increases in the Gulf of Mexico, output in the Lower 48 states eased to 88.9 bcfd on Wednesday due to small declines in Colorado, Wyoming and West Virginia, down from 89.3 bcfd on Tuesday, according to Refinitiv. That compares with an all-time daily high of 91.1 bcfd on July 5 and an average of 82.7 bcfd during this week last year. The amount of gas flowing to the nation’s liquefied natural gas (LNG) export terminals, meanwhile, held at 5.7 bcfd on Tuesday and Wednesday, down from 6.1 bcfd on Monday due to small declines at Cheniere Energy Inc’s Sabine Pass in Louisiana and Sempra Energy’s Cameron in Louisiana, according to Refinitiv data. That compares with a record high of 6.4 bcfd on Friday. In Asia, LNG futures at the Japan Korea Marker (JKM) fell to $4.45 per mmBtu, their lowest since April 2016. Traders, however, noted that was still almost $2 over Henry Hub futures, which is high enough to make it profitable to send U.S. cargoes to Asia. Week ended Week ended Year ago Five-year July 19 Jul 12 July 19 average (Forecast) (Actual) July 19 U.S. natgas storage (bcf): +37 +62 +27 +44 Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days Two-Week Total Forecast Current Prior Day Prior 10-Year 30-Year Day Year Norm Norm U.S. GFS HDDs 1 0 4 3 2 U.S. GFS CDDs 221 218 224 203 201 U.S. GFS TDDs 222 218 228 206 203 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This week Five-Yea Week last year r Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 88.1 89.1 89.6 82.7 73.9 U.S. Imports from Canada 7.5 7.5 7.9 8.7 8.0 U.S. LNG Imports 0.0 0.0 0.0 0.2 0.2 Total U.S. Supply 95.6 96.6 97.4 91.6 82.1 U.S. Demand (bcfd) U.S. Exports to Canada 2.5 2.7 2.7 2.7 1.8 U.S. Exports to Mexico 4.9 4.9 4.9 4.6 3.6 U.S. LNG Exports 5.9 6.0 6.0 3.2 1.1 U.S. Commercial 4.4 4.4 4.4 4.4 4.4 U.S. Residential 3.7 3.6 3.6 3.7 3.5 U.S. Power Plant 41.7 39.8 40.4 39.2 34.5 U.S. Industrial 21.5 21.5 21.6 21.3 20.0 U.S. Plant Fuel 4.4 4.4 4.4 4.4 4.4 U.S. Pipe Distribution 2.1 2.0 2.0 2.0 2.0 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 77.9 75.9 76.6 75.1 68.9 Total U.S. Demand 91.3 89.5 90.2 85.6 75.4 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Prior Day Day Henry Hub 2.33 2.34 Transco Z6 New York 2.06 2.03 PG&E Citygate 2.86 2.83 Dominion South 1.98 1.95 Chicago Citygate 2.06 2.04 Algonquin Citygate 2.16 2.11 SoCal Citygate 3.59 3.49 Waha Hub 0.35 0.41 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Prior Day Day New England 27.00 27.25 PJM West 27.75 24.25 Ercot North 27.00 28.75 Mid C 40.50 47.13 Palo Verde 62.25 67.00 SP-15 59.00 66.75 (Reporting by Scott DiSavino Editing by Chizu Nomiyama)