Speculators boost U.S. natgas net longs for 2nd straight week
Jan 5 (Reuters) - U.S. natural gas speculators boosted their net long positions for a second week in a row, in the week to Jan. 2, betting prices will rise as supplies tighten after utilities pulled record amounts of gas out of storage during the
brutally cold days since Christmas.
Speculators in four major New York Mercantile Exchange (NYMEX) and Intercontinental Exchange (ICE) markets added to their bullish bets by 56,005 contracts to 112,097 in the week to Jan. 2, the U.S. Commodity Futures Trading Commission said on Friday. It was the biggest weekly increase in speculative net longs since December 2016.
It compares with a five-year (2013-2017) average speculative net long position of around 161,450. The biggest net long position was 456,475 in April 2013, while the biggest net short position was 166,165 in November 2015, according to Reuters data.
Gas futures on the NYMEX averaged $2.92 per million British thermal units during the four trading days ended Jan. 2 versus $2.64 during the four trading days ended Dec. 26. There were four trading days during the week ended Jan. 2 due to the New Year's holiday and four during the week ended Dec. 26 due to the Christmas holiday.
Gas demand in the lower 48 U.S. states hit a record high of 141.7 billion cubic feet per day (bcfd) on Monday, New Year's Day, and has remained near that lofty level all week, according to Thomson Reuters data. To meet that demand, analysts said utilities likely pulled a record 332 billion cubic feet of gas from storage during the
frigid week ended Jan. 5.
That would be the record biggest withdrawal for any week, according to federal energy data going back to 1994, and if correct, would cut total stockpiles to more than 11 percent below the five-year average.
Pipeline and liquefied natural gas exports, meanwhile, are expected to rise from an annual average of 6.4 bcfd in 2016 to
8.7 bcfd in 2017 and 10.3 bcfd in 2018, according to federal energy projections in December.
That puts the United States on track to transition from a net importer of gas into a net exporter of the fuel on an annual basis in 2017. The United States was last a net exporter of gas on an annual basis in 1957.
(Reporting by Scott DiSavino; Editing by Diane Craft and Leslie Adler)
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At October’s HPI Forecast Breakfast for our sister publication, <i>Hydrocarbon Processing</i>, I shared <i>Gas Processing</i>’s forecast on change in the LNG industry.
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The shale gas boom established the US as the world’s leading natural gas producer and is responsible for billions of dollars of investments in the US gas processing industry. Since 2012, the US has witnessed unprecedented growth in new gas processing capacity and infrastructure. This rise is due to greater production of domestic shale gas, which is providing cheap, available feedstock to fuel the domestic gas processing, LNG and petrochemical industries. New gas processing projects include the construction of billions of cubic feet per day of new cryogenic and gas processing capacity, NGL fractionators, multi-billion-dollar pipeline infrastructure projects, and the development of millions of tons per year of new LNG export terminal construction. Attend this webcast to hear from Lee Nichols, Editor/Associate Publisher, Hydrocarbon Processing, Scott Allgood, Director-Data Services, Energy Web Atlas and Peregrine Bush, Senior Cartographic Editor, Petroleum Economist as they discuss the future of LNG and the application of Energy Web Atlas, a web-based GIS platform which allows users to track real-time information for every LNG project.
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