U.S. natgas futures gain 3% on colder midday weather forecast
Nov 16 (Reuters) -
U.S. natural gas futures closed about 3% higher on Wednesday, reversing earlier losses as colder midday
weather forecasts outweighed news a few liquefied natural gas (LNG) vessels turned away from the Freeport
export plant in Texas in recent days and expectations its restart will be delayed.
Federal pipeline safety regulators released a heavily redacted consultant's report blaming inadequate
operating and testing procedures, human error and fatigue for the June 8 explosion that shut the Freeport
plant.
Sources familiar with Freeport LNG's filing said the company had not yet submitted a request to resume
service to the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration
(PHMSA). Many analysts said that means the plant will not return to service until December at the earliest.
Until late last week, Freeport had said repeatedly the plant remained on track to return to service in
November. In comments made in recent days, however, the company did not mention a restart date.
Once the 2.1 billion-cubic-feet-per-day (bcfd) Freeport facility restarts, U.S. gas prices will likely
rise due to increased demand from the country's LNG export plants. Until the facility restarts, less U.S. gas
will be available to export to Europe, where prices have spiked around 17% this week. Europe
needs U.S. gas because Russia has slashed its gas exports there after several European countries imposed
sanctions on Moscow for its invasion of Ukraine.
A couple of vessels seem to have given up on a quick restart for Freeport. Prism Brilliance, which waited
outside the plant for about three weeks from mid-October, was now sitting outside of Corpus Christi where
Cheniere Energy Inc (LNG) has an LNG export plant.
LNG Rosenrot and Prism Agility, which were expected to arrive at Freeport in late November, have turned
around in the Atlantic Ocean and were now heading back east, according to Refinitiv data.
A couple of vessels, however, were still waiting outside Freeport: Prism Diversity and Prism Courage.
Worries about a possible U.S. railroad strike have underpinned gas prices because a rail strike would
threaten coal deliveries to U.S. utilities, forcing generators to burn more gas.
A third U.S. rail union
voted this week to reject
a tentative national contract reached in September, but expects to continue negotiating to reach a deal.
Front-month gas futures rose 16.6 cents, or 2.8%, to settle at $6.200 per million British
thermal units (mmBtu).
Gas futures were up about 66% so far this year as much higher global gas prices feed demand for U.S.
exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine.
Gas was trading at $35 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $26
at the Japan Korea Marker (JKM) in Asia.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states slid to 99.2 bcfd so far in
November, down from a record 99.4 bcfd in October.
With much colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would
jump from 122.6 bcfd this week to 126.6 bcfd next week. The forecast for this week was higher than Refinitiv's
outlook on Tuesday, while its forecast for next week was lower.
The average amount of gas flowing to U.S. LNG export plants rose to 11.8 bcfd so far in November, up from
11.3 bcfd in October.
Week ended Week ended Year ago Five-year
Nov 11 Nov 4 Nov 11 average
(Forecast) (Actual) Nov 11
U.S. weekly natgas storage change (bcf): +63 +79 +23 -5
U.S. total natgas in storage (bcf): 3,643 3,580 3,640 3,656
U.S. total storage versus 5-year average -0.2% -2.1%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2021 (2017-2021)
Henry Hub 5.93 6.03 5.12 3.73 2.89
Title Transfer Facility (TTF) 36.52 37.45 27.71 16.04 7.49
Japan Korea Marker (JKM) 27.79 27.23 32.98 18.00 8.95
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 353 364 304 296 309
U.S. GFS CDDs 5 5 8 11 9
U.S. GFS TDDs 358 369 312 307 318
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 98.8 100.1 100.4 95.3 89.6
U.S. Imports from Canada 6.2 8.5 8.0 8.8 8.2
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 105.0 108.5 108.4 104.1 97.9
U.S. Demand (bcfd)
U.S. Exports to Canada 2.3 2.2 2.2 3.3 2.9
U.S. Exports to Mexico 5.8 5.6 5.7 5.5 5.1
U.S. LNG Exports 11.5 12.3 12.7 11.3 6.4
U.S. Commercial 8.5 14.2 15.9 12.0 11.5
U.S. Residential 11.6 23.0 26.0 18.2 17.2
U.S. Power Plant 29.1 32.3 30.9 27.4 26.0
U.S. Industrial 22.6 25.2 25.5 23.4 24.0
U.S. Plant Fuel 4.9 4.9 5.0 4.9 4.9
U.S. Pipe Distribution 2.1 2.7 2.8 2.7 2.1
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 78.9 102.5 106.1 88.7 85.8
Total U.S. Demand 98.4 122.6 126.6 108.8 100.2
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Nov 18 Nov 11 Nov 4 Oct 28 Oct 21
Wind 10 15 12 15 11
Solar 3 3 3 3 3
Hydro 7 6 5 5 5
Other 2 3 2 2 3
Petroleum 0 0 0 0 0
Natural Gas 40 38 39 37 39
Coal 17 16 18 18 19
Nuclear 21 20 20 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 5.90 6.24
Transco Z6 New York 6.50 6.39
PG&E Citygate 9.05 8.76
Dominion South 5.34 5.43
Chicago Citygate 5.94 6.21
Algonquin Citygate 6.46 6.64
SoCal Citygate 8.95 8.87
Waha Hub 5.35 5.00
AECO 4.97 4.60
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 64.00 81.25
PJM West 78.25 103.00
Ercot North 75.00 71.50
Mid C 99.50 107.11
Palo Verde 84.75 85.50
SP-15 85.00 84.50
(Reporting by Scott DiSavino; editing by Jonathan Oatis and David Gregorio)
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