By Sherin Elizabeth Varghese
(Reuters) -U.S. natural gas futures rose more than 2% on Wednesday, snapping a two-day losing streak, as hotter mid-July forecasts are expected to lift demand for air conditioning over the next two weeks, prompting power generators to burn more gas.
Front-month gas futures for August delivery on the New York Mercantile Exchange (NYMEX) were 7.4 cents, or 2.2%, higher at $3.49 per million British thermal units by 10:14 a.m. EDT (1414 GMT).
“We’re starting to see some heat coming onto the maps for the middle of July, and that’s bringing some support back into the natural gas markets,” said Gary Cunningham, director of market research at Tradition Energy.
“We’re also seeing all of the LNG terminals come out of maintenance, and that just creates fundamental support from a base perspective.”
The main risk lies in how the winter contracts, particularly January, respond after the U.S. Energy Information Administration’s weekly storage report due on Thursday, Cunningham said.
A smaller-than-expected injection in the low 40s could push the January futures contract toward the $5 level, with winter demand posing the biggest upside risk, he added.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states has risen to 106.2 billion cubic feet per day so far in July, up from 105.9 bcfd in June, when normal spring pipeline maintenance curbed production. Output remains just below the monthly record high of 106.3 bcfd set in March.
LSEG estimated 206 total degree days over the next two weeks, compared with 182 estimated on Tuesday. It also forecast average gas demand in the Lower 48, including exports, increased to 106.1 billion cubic feet per day for the current week from 103.7 bcfd in the prior week.
The normal for this time of year is 172 TDDs. Total degree days measure the number of degrees a day’s average temperature is above or below 65 degrees Fahrenheit (18 degrees Celsius) to estimate demand to cool or heat homes and businesses.
The average amount of gas flowing to the eight big U.S. LNG export plants fell to 14.4 bcfd in June, down from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.
Meanwhile, Russia’s exports of liquefied natural gas in the first half of the year declined by 4.4% from a year earlier to 15.2 million metric tons, LSEG preliminary data showed on Wednesday, amid international sanctions over Ukraine.
In particular, the U.S. has imposed sanctions on companies and vessels tied to Russia’s new Arctic LNG 2 project because of the conflict in Ukraine, effectively freezing it due to difficulties for Moscow in securing buyers.
U.S. President Donald Trump has urged the European Union to buy more U.S. LNG and pledged to boost supply.
Hurricanes are a double-edged sword for gas markets. They can drive prices up by cutting offshore production, even if just 2% comes from federal Gulf waters, but just as easily drag them down by knocking out LNG export terminals or slashing demand during widespread power outages. Some storms hit both sides of the equation.
“Any Gulf of Mexico tropical activity would have to thread a needle to avoid LNG facilities that are located roughly every 200 miles between Corpus and Plaquemines,” BofA Global Research said in a note.
“Tropical disruptions to LNG exports would likely be bearish for domestic U.S. natural gas markets but bullish for global gas markets.”
Dutch and British wholesale gas prices rose on Wednesday morning, rebounding from falls earlier in the week. [NG/EU]
Week Week Year Five-y
ended ended ago ear
Jun Jun Jun averag
27 20 27 e
Forec Actua Jun 27
ast l
U.S. weekly natgas +51 +96 +35 +61
storage change (bcf):
U.S. total natgas in 2,949 2,898 3,129 2,780
storage (bcf):
U.S. total storage +6.1% +6.6%
versus 5-year average
Global Gas Benchmark This Prior Five-
Futures ($ per mmBtu) Month Year Year
Curre Prior Last Averag Avera
nt Day Year e 2024 ge
Day (2019
-2023
)
Henry Hub 2.81 2.41 3.52
3.41 3.41
Title Transfer Facility 10.87 10.95 15.47
(TTF)
10.93 10.87
Japan Korea Marker 12.30 11.89 15.23
(JKM)
13.11 13.13
LSEG Heating (HDD),
Cooling (CDD) and Total
(TDD) Degree Days
Two-Week Total Forecast
Curre Prior Prior 10-Yea 30-Ye
nt Day Year r Norm ar
Day Norm
U.S. GFS HDDs
3
4 4 1 4
U.S. GFS CDDs
202 178 216 180 168
U.S. GFS TDDs
206 182 217 183 172
LSEG U.S. Weekly GFS
Supply and Demand
Forecasts
This Five-
Week Year
Prior Curre Next Last (2020
Week nt Week Year -2024
Week )Aver
age
For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry 103.0 96.8
Production
106.9 107.2 107.0
U.S. Imports from N/A 7.3
Canada
7.9 8.2 7.8
U.S. LNG Imports 0.0 0.0
0.0 0.0 0.0
Total U.S. Supply N/A 104.1
114.9 115.4 114.7
U.S. Demand (bcfd)
U.S. Exports to Canada N/A 2.3
1.8 1.9 2.0
U.S. Exports to Mexico N/A 6.3
5.9 6.3 6.5
U.S. LNG Exports 12.7 9.1
14.2 15.2 15.6
U.S. Commercial 4.4 4.8
4.4 4.4 4.3
U.S. Residential 3.7 4.3
3.8 3.6 3.6
U.S. Power Plant 44.2 38.0
43.7 44.9 44.6
U.S. Industrial 21.7 21.5
22.3 22.2 22.2
U.S. Plant Fuel 5.2 5.2
5.3 5.3 5.3
U.S. Pipe Distribution 2.1 2.8
2.2 2.2 2.2
U.S. Vehicle Fuel 0.1 0.2
0.1 0.1 0.1
Total U.S. Consumption 81.4 76.8
81.9 82.7 82.3
Total U.S. Demand N/A 88.2
103.7 106.1 106.4
N/A is Not Available
U.S. Northwest River 2025 2025 2024 2023 2022
Forecast Center (NWRFC) Curre Prio % of % of % of
at The Dalles Dam nt r Day Norma Normal Norma
(Fiscal year ending Sep Day % of l Actual l
30) % of Norma Actua Actua
Norma l l l
l Forec
Forec ast
ast
Apr-Sep 74 83 107
76 76
Jan-Jul 76 77 102
78 78
Oct-Sep 77 76 103
79 79
U.S. weekly power
generation percent by
fuel – EIA
Week Week 2024 2023 2022
ended ended
July Jun
4 27
Wind 11 10 11
6 10
Solar 5 4 3
7 7
Hydro 6 6 6
5 5
Other 1 2 2
1 1
Petroleum 0 0 0
0 0
Natural Gas 42 41 38
44 42
Coal 16 17 21
19 19
Nuclear 19 19 19
17 16
SNL U.S. Natural Gas
Next-Day Prices ($ per
mmBtu)
Hub
Curre Prior
nt Day
Day
Henry Hub
3.26 3.26
Transco Z6 New York
2.93 2.93
PG&E Citygate
3.72 3.72
Eastern Gas (old
Dominion South)
2.71 2.71
Chicago Citygate
2.93 2.93
Algonquin Citygate
3.38 3.38
SoCal Citygate
4.25 4.25
Waha Hub
2.20 2.20
AECO
0.02 0.02
ICE U.S. Power Next-Day
Prices ($ per
megawatt-hour)
Hub
Curre Prior
nt Day
Day
New England
66.08 66.08
PJM West
55.06 55.06
Mid C
70.70 70.70
Palo Verde
58.23 58.23
SP-15
40.26 40.26
text_section_type=”notes”>For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.For Interactive Map, type ‘Interactive Map’ in the box at upper left of the LSEG terminalFor graphics on Baker Hughes rig counts, see: For next-day SNL U.S. gas prices, see:For next-day SNL U.S. power prices, see:For U.S. natgas price and storage polls, see: [NGAS/POLL]For U.S. nuclear power outages, see: [NUKE/]For U.S. Northwest hydro power report, see:For U.S./Canada natural gas rig count vs Henry Hub futures price, see: For the U.S. natural gas speed guide, see:For the U.S. power speed guide, see:To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined) plus (ICE Henry Hub options and futures combined divided by four) plus (NYMEX Henry Hub swaps options and futures combined divided by four) plus (NYMEX Henry Hub penultimate gas swaps divided by four)NYMEX Henry Hub options and futures combinedNYMEX Henry Hub futures onlyICE Henry Hub options and futures combinedNYMEX Henry Hub swaps options and futures combinedNYMEX Henry Hub Penultimate gas swaps
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Jan Harvey)
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