July 20, 2020 / 2:23 PM / 18 days ago

UPDATE 3-U.S. natgas futures drop over 4% to 3-week low as output rises

 (Adds closing prices)
    July 20 (Reuters) - U.S. natural gas futures dropped more than 4% on Monday to a three-week low as
output increases and stockpiles remain about 16% over the five-year average.
    Some analysts said the market was starting to write off the rest of the summer after prices dropped
about 5% last week even though this is the hottest time of year and the weather is expected to remain
hotter-than-normal through at least early August.
    Front-month gas futures fell 7.7 cents, or 4.5%, to settle at $1.641 per million British
thermal units, their lowest close since June 26.
    Refinitiv said production in the Lower 48 U.S. states averaged 88.4 billion cubic feet per day
(bcfd) so far in July, up from a 20-month low of 87.0 bcfd in June but still well below the all-time
monthly high of 95.4 bcfd in November. Traders noted output was rising as EQT Corp boosted
production in Appalachia.
    As consumers crank up their air conditioners, Refinitiv forecast U.S. demand, including exports,
will rise from 92.5 bcfd this week to 94.1 bcfd next week. That is higher than Refinitiv's outlook on
Friday.
    Pipeline gas flowing to U.S. LNG export plants averaged 3.3 bcfd (34% utilization) so far in July,
down from a 20-month low of 4.1 bcfd in June and a record 8.7 bcfd in February. Utilization was about
90% in 2019.
    U.S. pipeline exports, meanwhile, rose as consumers in neighboring countries cranked up their air
conditioners.
    Refinitiv said pipeline exports to Canada averaged 2.4 bcfd so far in July, up from 2.3 bcfd in
June, but still below the all-time monthly high of 3.5 bcfd in December. Pipeline exports to Mexico
averaged 5.56 bcfd so far this month, up from 5.44 bcfd in June and on track to top the record 5.55 bcfd
in March.
        
                                       Week ended      Week ended    Year ago   Five-year   
                                          Jul 17         Jul 10       Jul 17     average    
                                        (Forecast)      (Actual)                  Jul 17    
 U.S. natgas storage (bcf):                +42            +45          +44         +37      
                                                                                            
                                                                                            
 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                              1              1            2           4            2
 U.S. GFS CDDs                             246            244          220         206          202
 U.S. GFS TDDs                             247            245          222         210          204
                                                                                            
 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              88.0           89.1         88.8        90.3         78.1
 U.S. Imports from Canada                  7.0            6.8          6.8         8.1          8.2
 U.S. LNG Imports                          0.0            0.0          0.0         0.0          0.2
 Total U.S. Supply                         95.0           96.0         95.6        98.4         86.5
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.5            2.4          2.4         2.7          2.0
 U.S. Exports to Mexico                    5.7            5.6          5.6         5.1          4.2
 U.S. LNG Exports                          3.4            3.9          4.4         6.1          2.1
 U.S. Commercial                           4.3            4.4          4.4         4.4          4.4
 U.S. Residential                          3.5            3.5          3.5         3.5          3.5
 U.S. Power Plant                          43.3           44.7         45.7        40.4         37.2
 U.S. Industrial                           21.5           21.4         21.5        21.5         20.3
 U.S. Plant Fuel                           4.3            4.4          4.4         4.4          4.4
 U.S. Pipe Distribution                    2.1            2.1          2.2         2.1          2.1
 U.S. Vehicle Fuel                         0.1            0.1          0.1         0.1          0.1
 Total U.S. Consumption                    79.2           80.6         81.7        76.4         72.0
 Total U.S. Demand                         90.8           92.5         94.1        90.3         80.3
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.79           1.79                              
 Transco Z6 New York NG-CG-NY-SNL        1.73           1.57                              
 PG&E Citygate NG-CG-PGE-SNL             2.42           2.49                              
 Dominion South NG-PCN-APP-SNL           1.32           1.28                              
 Chicago Citygate NG-CG-CH-SNL           1.69           1.70                              
 Algonquin Citygate NG-CG-BS-SNL         1.81           1.44                              
 SoCal Citygate NG-SCL-CGT-SNL           1.83           1.96                              
 Waha Hub NG-WAH-WTX-SNL                 1.46           1.54                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             25.75          20.75                              
 PJM West EL-PK-PJMW-SNL                38.50          36.25                              
 Ercot North EL-PK-ERTN-SNL             27.50          24.50                              
 Mid C EL-PK-MIDC-SNL                   30.10          14.58                              
 Palo Verde EL-PK-PLVD-SNL              37.75          35.50                              
 SP-15 EL-PK-SP15-SNL                   33.50          27.50                              
 
 (Reporting by Scott DiSavino
Editing by Nick Zieminski and Jonathan Oatis)
  
 
 
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