HomeNewsU.S. natgas drops on lower feedgas to Freeport LNG, storage surplus

U.S. natgas drops on lower feedgas to Freeport LNG, storage surplus

4/26/2024

(Reuters) - U.S. natural gas futures slipped ahead of the expiration of the May contract, weighed down by a drop in feedgas to Freeport LNG's Texas export terminal and a huge surplus of gas in storage.

On its last day as the front-month, gas futures <NGc1> for May delivery on the New York Mercantile Exchange traded 1.5 cents lower, or 0.9%, to $1.62 per million British thermal units (mmBtu) at 10:53 a.m. EDT, after drooping to its lowest since March 26 earlier in the session. Prices are down over 7% for the week.

On a daily basis, LNG feedgas was at 12.1 bcfd as the amount of gas flowing to Freeport LNG fell to 0.1 bcfd from 0.5 bcfd on Monday. Freeport LNG has suffered a series of outages this year, pressuring U.S. natural gas prices and adding to prices in Europe.

The issues with Freeport and weather conditions are pushing the market downward today, said Gary Cunningham, director of market research at Tradition Energy. However, the first tanker set sail from Freeport LNG's Texas export terminal on Tuesday, raising hopes of a resumption of gas processing after an outage earlier this month.

The U.S. Energy Information Administration (EIA) on Thursday said utilities injected 92 billion cubic feet (bcf) of gas into storage during the week ending April 19, beating the expectations of traders surveyed by Reuters ahead of the report, who expected weekly natural gas stocks would be up 82 bcf.

"We continue to see a very supply-heavy supply demand balance, which is why prices will remain depressed," Cunningham added.

Financial company LSEG forecasts gas demand in the Lower 48 states, including exports, to fall to 91.7 bcfd next week, from 92.2 bcfd this week.

"The expansion in the expiring May-June gas spread is offering additional evidence of an oversupplied market in which few users, such as utilities, see little need to stand for delivery with supplies more than ample to meet needs of a warmer than normal summer," energy advisory Ritterbusch and Associates said in a note.

LSEG said gas output in the Lower 48 U.S. states had fallen to an average of 96.9 billion cubic feet per day (bcfd) in April from 100.8 bcfd in March. That compares with a monthly record of 105.6 bcfd in December 2023.

Meanwhile, in Europe gas prices were slightly lower as forecasts for milder weather outweighed the impact of Norwegian outages and concerns over liquefied natural gas (LNG) supply. [NG/EU]

 

Week ended Apr 26 Forecast

Week ended Apr 19 Actual

Year ago Apr 19

Five-year average

Apr 19

  

U.S. weekly natgas storage change (bcf):

+47

+92

+77

+59

  

U.S. total natgas in storage (bcf):

2,472

2,425

1,986

1,770

  

U.S. total storage versus 5-year average

34.2%

37%

      
           
           

Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2023

Five-Year Average (2018-2022)

Henry Hub <NGc1>

1.56

1.66

2.20

2.66

3.60

Title Transfer Facility (TTF) <TRNLTTFMc1>

9.24

9.41

13.49

13.04

14.39

Japan Korea Marker (JKM) <JKMc1>

10.43

10.44

12.34

14.39

14.31
           
           

LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days

          

Two-Week Total Forecast

Current Day

Prior Day

Prior Year

10-Year Norm

30-Year Norm

U.S. GFS HDDs

62

64

135

148

150

U.S. GFS CDDs

73

73

32

38

35

U.S. GFS TDDs

135

137

167

186

185
           

LSEG U.S. Weekly GFS Supply and Demand Forecasts

          
 

Prior Week

Current Week

Next Week

This Week Last Year

Five-Year (2019-2023) Average For Month

U.S. Supply (bcfd)

          

U.S. Lower 48 Dry Production

97.0

96.9

97.0

101.3

95.0

U.S. Imports from Canada

7.1

6.8

6.7

7.6

7.8

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.0

Total U.S. Supply

104.1

103.7

103.7

108.9

102.8
           

U.S. Demand (bcfd)

          

U.S. Exports to Canada

2.1

2.2

2.2

1.9

2.4

U.S. Exports to Mexico

6.7

6.6

6.5

6.0

5.4

U.S. LNG Exports

11.7

12.1

12.1

14.4

10.1

U.S. Commercial

7.8

5.8

5.5

7.4

8.4

U.S. Residential

10.1

6.3

5.8

9.6

11.8

U.S. Power Plant

28.6

30.0

30.5

25.6

22.7

U.S. Industrial

23.3

23.3

22.3

21.5

25.9

U.S. Plant Fuel

4.8

4.8

4.8

4.9

5.0

U.S. Pipe Distribution

2.0

1.9

1.9

2.1

2.3

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

76.8

71.3

70.9

71.2

76.2

Total U.S. Demand

97.3

92.2

91.7

93.5

94.1
           
           
           
           

U.S. weekly power generation percent by fuel - EIA

          
 

Week ended Apr 26

Week ended Apr 19

Week ended Apr 12

Week ended Apr 5

Week ended Mar 29

Wind

14

18

16

15

16

Solar

6

7

6

5

5

Hydro

7

7

7

7

8

Other

1

2

1

1

1

Petroleum

0

0

0

0

0

Natural Gas

38

35

37

38

38

Coal

13

13

13

13

13

Nuclear

20

19

20

20

19
           

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

          

Hub

Current Day

Prior Day

      

Henry Hub <NG-W-HH-SNL>

1.46

1.60

      

Transco Z6 New York <NG-CG-NY-SNL>

1.32

1.53

      

PG&E Citygate <NG-CG-PGE-SNL>

2.02

2.25

      

Eastern Gas (old Dominion South) <NG-PCN-APP-SNL>

1.27

1.37

      

Chicago Citygate <NG-CG-CH-SNL>

1.25

1.40

      

Algonquin Citygate <NG-CG-BS-SNL>

1.40

1.56

      

SoCal Citygate <NG-SCL-CGT-SNL>

1.70

1.75

      

Waha Hub <NG-WAH-WTX-SNL>

0.86

0.34

      

AECO <NG-ASH-ALB-SNL>

0.97

1.04

      
           

SNL U.S. Power Next-Day Prices ($ per megawatt-hour)

          

Hub

Current Day

Prior Day

      

New England <EL-PK-NPMS-SNL>

23.75

25.75

      

PJM West <EL-PK-PJMW-SNL>

22.25

27.50

      

Ercot North <EL-PK-ERTN-SNL>

19.50

14.50

      

Mid C <EL-PK-MIDC-SNL>

25.00

38.07

      

Palo Verde <EL-PK-PLVD-SNL>

-0.50

1.50

      

SP-15 <EL-PK-SP15-SNL>

4.00

-1.75

      

 

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