ReutersReuters

U.S. natgas dips at Dec contract expiry on lower demand forecast

U.S. natural gas futures slid on the expiration day of the December contract on Monday, as forecasts for demand dropped and production rose to near all-time highs.

On its last day as the front-month, gas futures NG1! for December delivery fell 31.2 cents, or 4.4%, to settle at $6.712 per million British thermal units.

"We've got some weather model moderation in the 6-10 day period, meaning that we lost some heating degree days ... there's going to be a fair amount of volatility here between the weather model forecast, the post trading from the holiday season and then, of course, for contract expiration," said Robert DiDona of Energy Ventures Analysis.

Refinitiv projected that average U.S. gas demand, including exports, would fall to 116 billion cubic feet per day (bcfd) this week from 125.8 bcfd in the prior week.

Refinitiv data also showed average gas output in the U.S. Lower 48 states rose to 99.6 bcfd so far in November, up from a monthly record of 99.4 bcfd in October.

"This market has relinquished most of last week's strong gains largely on negative spillover from the renewed plunge in oil prices," energy consulting firm Ritterbusch and Associates said in a note.

Oil prices fell close to their lowest this year earlier on Monday as street protests against strict COVID-19 curbs in China, the world's biggest crude importer, stoked concern over the outlook for fuel demand.

That matters because once the 2.1-billion-cubic-feet-per-day (bcfd) plant restarts it will consume U.S. gas to turn it into LNG for export, boosting demand for gas at the same time that cold winter weather will boost heating demand.

Meanwhile, British gas contracts for short-term delivery jumped on Monday morning on rising demand amid cold weather and low wind power generation, while Dutch contracts eased on steady supplies.

Week ended Nov 25 (Forecast)

Week ended

Nov 18 (Actual)

Year ago Nov 25

Five-year average 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 Last Year

Prior Year Average 2021

Five Year Average (2017-2021)

Henry Hub NG1!

6.87

7.33

5.12

3.73

2.89

Title Transfer Facility (TTF) (TRNLTTFMc1)

35.75

36.34

27.71

16.04

7.49

Japan Korea Marker (JKM) (JKMc1)

29.96

31.12

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 Norm

30-Year Norm

U.S. GFS HDDs

404

215

305

347

362

U.S. GFS CDDs

8

6

8

6

7

U.S. GFS TDDs

408

221

313

353

369

Refinitiv U.S. Weekly GFS Supply and Demand Forecasts

Prior Week

Current Week

Next Week

This Week Last Year

Five-Year Average For Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production

100.1

100.6

101.0

89.6

U.S. Imports from Canada

91.5

8.7

9.2

8.2

U.S. LNG Imports

0.0

0.0

0.0

0.1

Total U.S. Supply

109.2

109.2

110.2

97.9

U.S. Demand (bcfd)

U.S. Exports to Canada

3.3

3.7

3.7

2.9

U.S. Exports to Mexico

5.3

5.4

5.5

5.1

U.S. LNG Exports

12.0

11.7

12.3

6.4

U.S. Commercial

15.4

13.7

16.0

11.5

U.S. Residential

25.3

22.3

27.2

17.2

U.S. Power Plant

31.4

27.0

29.8

26.0

U.S. Industrial

25.3

24.5

25.4

24.0

U.S. Plant Fuel

4.9

5.0

5.0

4.9

U.S. Pipe Distribution

2.8

2.5

2.8

2.1

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

Total U.S. Consumption

105.2

95.1

106.3

85.8

Total U.S. Demand

125.8

116.0

127.8

100.2

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

Week ended Dec 2

Week ended Nov 25

Week ended Nov 18

Week ended Nov 11

Week ended Nov 4

Wind

14

9

9

15

12

Solar

3

2

3

3

3

Hydro

6

6

7

6

5

Other

2

2

2

3

2

Petroleum

0

0

0

0

0

Natural Gas

32

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 (NG-W-HH-SNL)

--

6.57

Transco Z6 New York (NG-CG-NY-SNL)

--

6.10

PG&E Citygate (NG-CG-PGE-SNL)

--

12.21

Dominion South (NG-PCN-APP-SNL)

--

5.82

Chicago Citygate (NG-CG-CH-SNL)

--

6.15

Algonquin Citygate (NG-CG-BS-SNL)

--

6.87

SoCal Citygate (NG-SCL-CGT-SNL)

--

10.58

Waha Hub (NG-WAH-WTX-SNL)

--

5.50

AECO (NG-ASH-ALB-SNL)

--

6.65

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

Hub

Current Day

Prior Day

New England (EL-PK-NPMS-SNL)

--

76.50

PJM West (EL-PK-PJMW-SNL)

--

49.50

Ercot North (EL-PK-ERTN-SNL)

--

41.50

Mid C (EL-PK-MIDC-SNL)

--

85.00

Palo Verde (EL-PK-PLVD-SNL)

--

50.50

SP-15 (EL-PK-SP15-SNL)

--

95.50

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