U.S. natgas futures rise on forecasts for cooler December weather
Nov 29 (Reuters) - U.S. natural gas futures edged up about 1% to near a one-week high on Tuesday on
forecasts for cooler weather through mid-December than previously expected.
That price increase, however, was limited by forecasts for less gas demand over the next two weeks than
previously expected.
In addition to colder weather, which will boost the amount of gas burned to heat homes and businesses,
energy traders noted gas demand would also rise in December if Freeport LNG's liquefied natural gas (LNG)
export plant in Texas returns to service, as expected.
Freeport LNG has said it plans to start producing LNG again in mid-December and reach full capacity of
about 2.1 billion cubic feet per day (bcfd) in March.
The plant was shut on June 8 due to an explosion caused by inadequate operating and testing procedures,
human error and fatigue, according to a report by consultants hired by the company to review the incident and
propose corrective actions.
JERA, which buys LNG from Freeport, said it expects the plant to return to service in December.
Freeport LNG, however, has not yet submitted a request to restart the plant to the U.S. Department of
Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), sources familiar with the
company's filings have told Reuters.
There are already a few ships waiting in the Gulf of Mexico to pick up LNG from Freeport - some have been
there for weeks - including Prism Brilliance, Prism Diversity and Prism Courage, according to shipping data
from Refinitiv.
On its first day as the front-month, gas futures for January delivery was up 6.3 cents, or 0.9%,
from where the January contract was trading on Monday to $7.259 per million British thermal units (mmBtu) at
9:01 a.m. EST (1401 GMT) on Tuesday, putting the contract on track for its highest close since Nov. 23.
In the spot market, meanwhile, next-day gas prices at the PG&E Citygate in Northern
California rose to their highest since February 2019 for a third day in a row.
U.S. gas futures are up about 95% so far this year as much higher global prices feed demand for U.S.
exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine.
Gas was trading at $39 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $30
at the Japan Korea Marker (JKM) in Asia.
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U.S. gas futures lag global prices because the United States is the world's top producer with all the fuel
it needs for domestic use, while capacity constraints and the Freeport outage have prevented the country from
exporting more LNG.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 99.6 bcfd so far
in November, up from a monthly record 99.4 bcfd in October.
With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from
115.1 bcfd this week to 126.1 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Monday.
The average amount of gas flowing to U.S. LNG export plants has jumped to 11.7 bcfd so far in November, up
from 11.3 bcfd in October.
That is still well below the monthly record of 12.9 bcfd in March due mostly to the ongoing outage at
Freeport. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG.
During the first 10 months of 2022, roughly 66%, or 7.0 bcfd, of U.S. LNG exports went to Europe, as
shippers diverted cargoes from Asia to get higher prices. Last year, just 29%, or about 2.8 bcfd, of U.S. LNG
exports went to Europe.
Week ended Week ended Year ago Five-year
Nov 25 Nov 18 Nov 25 average
(Forecast) (Actual) Nov 25
U.S. weekly natgas storage change (bcf): -103 -80 -54 -34
U.S. total natgas in storage (bcf): 3,461 3,564 3,572 3,569
U.S. total storage versus 5-year average -3.0% -1.1%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2021 (2017-2021)
Henry Hub 7.28 7.20 5.12 3.73 2.89
Title Transfer Facility (TTF) 39.61 37.26 27.71 16.04 7.49
Japan Korea Marker (JKM) 30.28 29.96 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 410 404 305 347 366
U.S. GFS CDDs 8 8 8 6 5
U.S. GFS TDDs 418 408 313 353 371
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 100.1 100.3 100.8 96.3 89.6
U.S. Imports from Canada 91.5 8.6 9.2 9.5 8.2
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 109.2 108.9 110.1 105.8 97.9
U.S. Demand (bcfd)
U.S. Exports to Canada 3.3 3.5 3.6 3.4 2.9
U.S. Exports to Mexico 5.3 5.6 5.5 5.8 5.1
U.S. LNG Exports 12.0 11.3 11.7 11.8 6.4
U.S. Commercial 15.4 13.6 15.8 12.7 11.5
U.S. Residential 25.3 22.2 26.8 19.5 17.2
U.S. Power Plant 31.4 26.7 29.5 28.5 26.0
U.S. Industrial 25.3 24.5 25.3 23.5 24.0
U.S. Plant Fuel 4.9 5.0 5.0 5.0 4.9
U.S. Pipe Distribution 2.8 2.5 2.8 2.5 2.1
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 105.2 94.6 105.3 91.8 85.8
Total U.S. Demand 125.8 115.1 126.1 112.8 100.2
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Dec 2 Nov 25 Nov 18 Nov 11 Nov 4
Wind 13 9 9 15 12
Solar 2 2 3 3 3
Hydro 6 6 7 6 5
Other 2 2 2 3 2
Petroleum 0 0 0 0 0
Natural Gas 33 39 41 38 39
Coal 20 20 18 16 18
Nuclear 23 20 20 20 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 6.00 6.57
Transco Z6 New York 5.45 6.10
PG&E Citygate 12.67 12.21
Dominion South 5.19 5.82
Chicago Citygate 5.36 6.15
Algonquin Citygate 5.79 6.87
SoCal Citygate 11.08 10.58
Waha Hub 5.21 5.50
AECO 4.94 6.65
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 73.75 76.50
PJM West 54.50 49.50
Ercot North 45.50 41.50
Mid C 162.62 85.00
Palo Verde 110.75 50.50
SP-15 117.25 95.50
(Reporting by Scott DiSavino; Editing by Paul Simao)
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