U.S. natgas up 1% on rising LNG exports, colder late Feb forecast
Feb 10 (Reuters) - U.S. natural gas futures edged up about 1% on Friday on rising liquefied natural gas (LNG) exports and forecasts for colder weather and higher heating demand in late February. Meteorologists forecast the weather would remain mostly warmer than normal from now through Feb. 22 (except for a couple of cold days on Feb. 17-18) before turning colder than normal starting Feb. 24. Energy analysts, however, noted colder than normal weather in late February does not boost heating demand by as much as cold in late January. The 30-year average temperature in the U.S. Lower 48 states is about 37 degrees Fahrenheit (3 Celsius) on Jan. 25 versus about 42 F on Feb. 25, according to data provider Refinitiv. The price increase also came with a growing belief that Freeport LNG's export plant in Texas would start pulling in more gas to produce LNG in coming weeks. Freeport, the second-biggest U.S. LNG export plant, shut after a fire in June 2022. Traders expect gas prices to rise once the plant starts producing LNG again. Freeport has said it would soon start sending gas to one of the plant's three liquefaction trains, which turn gas into LNG for export. On Thursday, federal regulators gave the company permission to return ship loading to service to free up space in its storage tanks. Many analysts, however, have said they do not expect the plant to return to full capacity until mid-March or later. A couple of Freeport's customers - Japan's JERA and Osaka Gas - have said they do not expect to get LNG from the plant until after March. Freeport has received an average of 35 million cubic feet of gas per day since Jan. 26 when federal regulators approved the company's plan to start cooling parts of the plant. That is a fraction of the 2.1 billion cubic feet per day (bcfd) of gas Freeport can pull in when operating at full power. Even though some vessels have turned away from Freeport in recent weeks, several tankers have been waiting in the Gulf of Mexico for several weeks to pick up LNG from the plant, including Prism Agility (since Jan. 2), Prism Brilliance (Jan. 26), Kmarin Diamond (Jan. 26), Nohshu Maru (Jan. 31) and Corcovado LNG (Feb. 10). In addition, there are several vessels on their way to Freeport, including LNG Rosenrot (expected to arrive around Feb. 11), Seapeak Bahrain (Feb. 20), Gaslog Wales (Feb. 23), British Achiever (Feb. 24) and LNG Endurance (March 5). Front-month gas futures rose 2.7 cents, or 1.1%, to $2.457 per million British thermal units at 9:19 a.m. EST (1419 GMT). Earlier this week, the contract closed at its lowest since December 2020. For the week, the front-month was on track to rise for the first time in eight weeks, gaining about 2% this week. Despite that weekly increase, however, futures were still down by a record 63% over the past eight weeks. Last week, futures were down by a record 64% over the past seven weeks. Refinitiv forecast U.S. gas demand, including exports, would drop from 125.4 bcfd this week to 119.8 bcfd next week as the weather turns milder before rising to 123.7 bcfd in two weeks when the weather turns colder again. The forecasts for this week and next were similar to Refinitiv's outlook on Thursday. With the amount of gas flowing to Freeport slowly rising in recent weeks, the average amount of feedgas going to U.S. LNG export plants rose to 12.6 bcfd so far in February, up from 12.3 bcfd in January. That compares with the monthly record of 12.9 bcfd in March 2022 before Freeport shut. Week ended Week ended Year ago Five-year Feb Feb 3 Feb 10 average 10(Forecast) (Actual) Feb 10 U.S. weekly natgas storage change (bcf): -115 -217 -195 -166 U.S. total natgas in storage (bcf): 2,251 2,366 1,938 2,083 U.S. total storage versus 5-year average 8.1% +5.2% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2022 (2018-2022) Henry Hub 2.45 2.43 4.46 6.54 3.60 Title Transfer Facility (TTF) 16.51 16.68 26.94 40.50 14.39 Japan Korea Marker (JKM) 17.92 17.93 25.82 34.11 14.31 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 367 352 405 406 393 U.S. GFS CDDs 5 5 4 6 5 U.S. GFS TDDs 372 357 409 412 398 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 96.0 96.9 97.8 91.7 87.7 U.S. Imports from Canada 8.4 8.4 8.2 10.2 9.1 U.S. LNG Imports 0.0 0.1 0.0 0.2 0.2 Total U.S. Supply 104.3 105.4 106.0 102.1 97.0 U.S. Demand (bcfd) U.S. Exports to Canada 2.2 2.8 3.0 2.2 2.7 U.S. Exports to Mexico 5.1 5.1 5.3 6.0 5.2 U.S. LNG Exports 12.6 12.6 12.3 12.3 6.6 U.S. Commercial 18.4 16.0 14.3 19.4 16.4 U.S. Residential 31.5 26.4 23.5 33.3 27.7 U.S. Power Plant 33.5 30.0 29.5 29.6 28.1 U.S. Industrial 26.1 24.6 24.4 26.0 25.2 U.S. Plant Fuel 4.7 4.8 4.8 4.9 4.8 U.S. Pipe Distribution 3.1 2.8 2.6 2.9 3.1 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 117.5 104.9 99.2 116.2 105.4 Total U.S. Demand 137.4 125.4 119.8 136.7 119.9 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended eek ended Feb 10 Feb 3 Jan 27 Jan 20 Jan 13 Wind 15 10 11 13 11 Solar 3 2 2 2 2 Hydro 6 7 7 7 7 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 35 39 38 36 38 Coal 17 21 19 18 19 Nuclear 21 19 21 21 21 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.40 2.40 Transco Z6 New York 2.05 2.11 PG&E Citygate 5.71 5.07 Eastern Gas (old Dominion South) 1.89 1.95 Chicago Citygate 2.34 2.41 Algonquin Citygate 2.35 2.52 SoCal Citygate 5.45 5.21 Waha Hub 2.03 1.96 AECO 1.93 2.16 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 27.00 39.25 PJM West 27.75 25.25 Ercot North 25.50 18.75 Mid C 60.60 65.67 Palo Verde 42.25 44.00 SP-5 40.50 42.00 (Reporting by Scott DiSavino; Editing by Andrea Ricci)
