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U.S. natgas futures fall over 3% as European prices slip

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U.S. natural gas futures slipped more than 3% on Tuesday, tracking a retreat in

European rates, with prices hitting a two-week low as supplies in the United States were seen rising.

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On its first day as the front-month, gas futures for October delivery fell 29.4 cents, or 3.1%, to

settle at $9.042 per million British thermal units (mmBtu), having dropped to their lowest level since Aug. 16

earlier in the session.

Data provider Refinitiv said gas output in the U.S. Lower 48 states rose to 98.1 billion cubic feet per

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day (bcfd) on Monday, its highest since Aug. 8.

“The production and overall supply increased not only from natural gas production, but also from slightly

higher Canadian imports,” said Robert DiDona of Energy Ventures Analysis.

“When you couple the current weather forecast, which did get a little warmer over the weekend, with the

supply gains and then the European gas price sell-off, I think it’s just resulted in a little bit of profit

taking.”

British and Dutch wholesale gas prices eased as Europe almost reached its target of gas inventories being

80% full. Gas was trading around $81 per mmBtu in Europe and $69 in Asia.

Europe was also gearing for a scheduled outage on the Nord Stream 1 pipeline, which runs under the Baltic

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Sea to Germany, for three days from Aug. 31 to Sep. 2, with market players concerned flows might not resume.

“This is an important time in the market in general and most years it comes with a fair amount of

volatility. … We could see some surprise power demand from gas generation increases as we have this late

summer heat wave that comes through the early part of September. … The possibility absolutely exists that we

can rally $0.75 to $0.85 and touch $10 again,” DiDona said further.

Meanwhile, the restart delay at the fire-hit Freeport liquefied natural gas (LNG) export plant in Texas,

leaves more fuel in the United States for utilities to refill storage.

Week ended Week ended Year ago Five-year

Aug 26 Aug 19 Aug 26 average

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(Forecast) (Actual) Aug 26

U.S. weekly natgas storage change (bcf): +56 +60 +21 +46

U.S. total natgas in storage (bcf): 2,635 2,579 2,868 2,978

U.S. total storage versus 5-year average -11.5% -12.0%

Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year

Last Year Average Average

2021 (2017-2021)

Henry Hub 9.26 9.67 4.03 3.73 2.89

Title Transfer Facility (TTF) 81.47 87.63 15.43 16.04 7.49

Japan Korea Marker (JKM) 68.67 68.80 16.36 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 30-Year

Norm Norm

U.S. GFS HDDs 3 5 4 12 16

U.S. GFS CDDs 169 198 163 162 147

U.S. GFS TDDs 172 203 167 174 163

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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 97.0 97.7 98.2 91.0 86.5

U.S. Imports from Canada 7.7 7.7 7.5 8.0 8.0

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 104.7 105.4 105.7 99.0 94.6

U.S. Demand (bcfd)

U.S. Exports to Canada 2.4 2.2 2.2 2.4 2.5

U.S. Exports to Mexico 5.6 5.7 5.6 6.3 5.4

U.S. LNG Exports 11.1 10.8 10.5 10.5 4.4

U.S. Commercial 4.5 4.5 4.5 4.6 4.5

U.S. Residential 3.6 3.6 3.6 3.7 3.4

U.S. Power Plant 41.4 41.9 40.9 36.8 38.8

U.S. Industrial 21.3 21.4 21.4 21.0 21.2

U.S. Plant Fuel 4.8 4.8 4.9 4.8 4.8

U.S. Pipe Distribution 2.1 2.1 2.1 2.1 2.1

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

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Total U.S. Consumption 77.7 78.5 77.5 73.0 74.9

Total U.S. Demand 96.8 97.1 95.8 92.3 87.2

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

Week ended Week ended Week ended Week ended Week ended

Sept 2 Aug 26 Aug 19 Aug 12 Aug 5

Wind 10 5 6 6 8

Solar 3 3 3 3 3

Hydro 5 6 6 5 5

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 40 44 42 45 42

Coal 21 22 22 22 21

Nuclear 18 18 19 17 17

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

Hub Current Day Prior Day

Henry Hub 9.24 9.48

Transco Z6 New York 9.00 8.83

PG&E Citygate 10.31 10.07

Dominion South 8.52 8.55

Chicago Citygate 8.82 8.71

Algonquin Citygate 9.07 8.85

SoCal Citygate 11.19 8.98

Waha Hub 7.82 7.75

AECO 0.76 3.72

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

Hub Current Day Prior Day

New England 126.75 87.00

PJM West 130.25 107.75

Ercot North 106.00 97.40

Mid C 197.20 123.20

Palo Verde 142.50 72.00

SP-15 146.25 73.50

(Reporting by Kavya Guduru in Bengaluru; editing by Jonathan Oatis)

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