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U.S. natgas hit 7-year high on Gulf storm worries, soaring global prices

    Sept 14 (Reuters) - U.S. natural gas futures climbed to a fresh seven-year high on Tuesday on worries
Tropical Storm Nicholas could delay the already slow return of production in the Gulf of Mexico and as record
global gas prices keep demand for U.S. exports high.
    Prices rose despite forecasts for less hot weather and lower demand over the next two weeks than
previously expected.
    Traders noted storms in the Gulf of Mexico, like Nicholas and Hurricane Ida, could boost gas prices by
cutting Gulf Coast production. But, they can also reduce demand and cut prices by disrupting liquefied natural
gas (LNG) exports and knocking out power to homes and businesses, especially the petrochemical facilities that
use lots of gas.
    The center of Nicholas was located about 15 miles (25 kilometers) south-southwest of Houston and could
cause life-threatening flash floods across the Deep South during the next couple of days, according to the
U.S. National Hurricane Center. The storm has already knocked out power to around 500,000 customers in Texas,
but so far has not had much of an impact on the region's liquefied natural gas (LNG) and nuclear power plants.

    Front-month gas futures rose 4.9 cents, or 0.9%, to $5.280 per million British thermal units
(mmBtu) at 9:21 a.m. EDT (1321 GMT), putting the contract on track for its highest close since February 2014
for a second day in a row.
    Since Hurricane Ida entered the Gulf of Mexico in late August, gas prices have soared over 32% due mostly
to the slow return of production after the storm. Traders said gas prices have also been supported by hotter
than normal U.S. weather and high air conditioning demand this summer, record global gas prices, and lower
than normal gas inventories in the United States and Europe ahead of the winter heating season when demand for
the fuel peaks.
    Data provider Refinitiv said gas output in the U.S. Lower 48 states fell to an average of 90.1 billion
cubic feet per day (bcfd) so far in September, from 92.0 bcfd in August, due mostly to Ida-related losses
along the Gulf Coast. That compares with a monthly record of 95.4 bcfd in November 2019.
    About 1.2 bcfd, or 52%, of gas production in the U.S. Gulf of Mexico remains shut-in since Ida, according
to government data.
    Refinitiv projected average U.S. gas demand, including exports, would rise from 86.8 bcfd this week to
87.1 bcfd next week as heating demand picks up in some regions. Those forecasts, however, were lower than
Refinitiv expected on Monday.
    The amount of gas flowing to U.S. LNG export plants rose to an average of 10.9 bcfd so far in September,
from 10.5 bcfd in August, as buyers around the world keep purchasing all the super-chilled gas the United
States can produce. That compares with a monthly record of 11.5 bcfd in April.
    Gas in Europe and Asia was trading around $23 and $19 per mmBtu, respectively,
compared with just $5 for the U.S. fuel. Gas at the Title Transfer Facility (TTF) in the Netherlands, the
European benchmark, was at a record high.
       
                                              Week ended     Week ended     Year ago   Five-year        
                                                Sep 10          Sep 3       Sep 10      average    
                                              (Forecast)      (Actual)                   Sep 10    
 U.S. weekly natgas storage change (bcf):         67             52            86          79           
 U.S. total natgas in storage (bcf):             2,990          2,923        3,601       3,237          
 U.S. total storage versus 5-year average        -7.6%          -7.4% Global Gas Benchmark Futures ($ per mmBtu)   Current Day     Prior Day    This Month  Prior Year   Five Year
                                                                           Last Year    Average      Average
                                                                                          2020     (2016-2020)
 Henry Hub                                       5.34           5.02          2.28        2.13        2.66
 Title Transfer Facility (TTF)                   22.87          20.87         3.94        3.24        5.19
 Japan Korea Marker (JKM)                        18.82          18.65         4.63        4.22        6.49 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                                    20             22            29          36          42
 U.S. GFS CDDs                                    130            140           97         113          105
 U.S. GFS TDDs                                    150            162          126         149          147 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                    89.9           91.0          91.3        88.3        82.6
 U.S. Imports from Canada                         7.0            7.1          7.1         6.2          7.6
 U.S. LNG Imports                                 0.0            0.0          0.0         0.1          0.1
 Total U.S. Supply                               97.0           98.1          98.5        96.6        90.3 U.S. Demand (bcfd)                                                                                     
 U.S. Exports to Canada                           2.6            2.5          2.5         2.4          2.3
 U.S. Exports to Mexico                           5.7            5.7          6.0         5.9          5.0
 U.S. LNG Exports                                11.0           11.2          10.9        7.5          3.1
 U.S. Commercial                                  4.6            4.7          4.8         5.0          4.8
 U.S. Residential                                 3.7            3.8          4.1         4.3          3.8
 U.S. Power Plant                                32.3           31.7          31.4        33.5        32.8
 U.S. Industrial                                 20.9           20.9          21.0        21.6        21.1
 U.S. Plant Fuel                                  4.4            4.5          4.5         4.5          4.4
 U.S. Pipe Distribution                           1.8            1.8          1.8         1.8          1.9
 U.S. Vehicle Fuel                                0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                          67.8           67.5          67.8        70.8        68.9
 Total U.S. Demand                               87.1           86.8          87.1        86.6        79.3 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                                     
 Hub                                          Current Day     Prior Day                                 
 Henry Hub NG-W-HH-SNL                         5.21           5.13                                    
 Transco Z6 New York NG-CG-NY-SNL              4.94           4.36                                    
 PG&E Citygate NG-CG-PGE-SNL                   7.32           6.66                                    
 Dominion South NG-PCN-APP-SNL                 4.64           4.16                                    
 Chicago Citygate NG-CG-CH-SNL                 5.11           4.78                                    
 Algonquin Citygate NG-CG-BS-SNL               5.01           4.45                                    
 SoCal Citygate NG-SCL-CGT-SNL                 7.81           7.54                                    
 Waha Hub NG-WAH-WTX-SNL                       4.79           4.57 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                                   
 Hub                                          Current Day     Prior Day                                 
 New England EL-PK-NPMS-SNL                    55.75          39.25                                   
 PJM West EL-PK-PJMW-SNL                       51.25          36.25                                   
 Ercot North EL-PK-ERTN-SNL                    57.50          45.00                                   
 Mid C EL-PK-MIDC-SNL                          85.00          82.88                                   
 Palo Verde EL-PK-PLVD-SNL                     89.49          94.50                                   
 SP-15 EL-PK-SP15-SNL                          73.00          82.00                                   
 
 (Reporting by Scott DiSavino
Editing by Nick Zieminski)
  
 
 
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