US natgas prices ease 1% to 1-week low ahead of Hurricane Milton
By Scott DiSavino
Oct 9 (Reuters) -U.S. natural gas futures eased about 1% to a fresh one-week low on Wednesday on expectations power generators would burn less gas after Hurricane Milton knocks out power to potentially millions of homes and businesses in Florida.
The U.S. National Hurricane Center projected Milton will slam into the west coast of Florida as a major storm Wednesday night before sweeping across the central part of the state on Thursday.
Those expected Florida power outages will add to the roughly 125,000 homes and businesses still without electric service in North Carolina and Georgia since Hurricane Helene moved inland after slamming into Florida on Sept. 26.
In 2023, power generators in Florida burned a record 3.9 billion cubic feet per day of gas to keep the lights on for the state's roughly 11.5 million power customers, according to data from the U.S. Energy Information Administration and PowerOutage.us.
That means every 1 million in customer outages reduces the need to burn around 0.3 bcfd of gas on average.
Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange fell 2.5 cents, or 0.9%, to $2.708 per million British thermal units at 8:32 a.m. EDT (1232 GMT), putting the contract on track for its lowest close since Sept. 26 for a fourth day in a row.
That was the first time the contract dropped for four days in a row since late August. During that time, it was down about 9%.
One factor that has weighed on futures prices all year has been low spot or next-day prices at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana.
The spot market has traded below front-month futures for 168 out of 194 trading days so far this year, according to data from financial firm LSEG. Next-day prices at the Henry Hub were down about 5% to $2.39 per mmBtu for Wednesday.
Analysts have noted that so long as spot prices remain far enough below front-month futures to cover margin and storage costs, traders should be able to lock in arbitrage profits by buying spot gas, storing it and selling a futures contract.
SUPPLY AND DEMAND
Financial company LSEG said average gas output in the Lower 48 U.S. states fell to 101.0 bcfd so far in October, down from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023.
LSEG forecast average gas demand in the Lower 48, including exports, will rise from 96.0 bcfd this week to 97.4 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday.
Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants slid to an average of 12.4 bcfd so far in October, down from 12.7 bcfd in September. That compares with a monthly record high of 14.7 bcfd in December 2023.
That reduction was due mostly to the planned Sept. 20 shutdown of Berkshire Hathaway Energy's 0.8-bcfd Cove Point LNG export plant in Maryland for around three weeks of annual maintenance, which will likely end around Oct. 10.
Week ended Oct 4 Forecast | Week ended Sep 27 Actual | Year ago Oct 4 | Five-year average Oct 4 | ||
U.S. weekly natgas storage change (bcf): | +68 | +55 | +85 | +96 | |
U.S. total natgas in storage (bcf): | 3,615 | 3,547 | 3,505 | 3,453 | |
U.S. total storage versus 5-year average | 4.7% | 5.7% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.70 | 2.73 | 3.15 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 12.42 | 12.42 | 14.55 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 13.10 | 13.14 | 16.30 | 14.39 | 14.31 |
LSEG 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 | 106 | 102 | 107 | 105 | 131 |
U.S. GFS CDDs | 46 | 50 | 41 | 58 | 43 |
U.S. GFS TDDs | 152 | 152 | 148 | 163 | 174 |
LSEG U.S. Weekly GFS Supply and Demand Forecasts | |||||
Prior Week | Current Week | Next Week | This Week Last Year | Five-Year (2019-2023) Average For Month | |
U.S. Supply (bcfd) | |||||
U.S. Lower 48 Dry Production | 101.7 | 101.0 | 101.1 | 103.1 | 96.8 |
U.S. Imports from Canada | 7.6 | 7.8 | 7.3 | N/A | 7.1 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 109.3 | 108.9 | 108.4 | N/A | 103.9 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 2.0 | 1.9 | 2.0 | N/A | 2.3 |
U.S. Exports to Mexico | 6.6 | 6.5 | 6.6 | N/A | 5.9 |
U.S. LNG Exports | 12.0 | 12.5 | 13.0 | 13.4 | 10.0 |
U.S. Commercial | 4.9 | 5.3 | 6.7 | 6.2 | 6.9 |
U.S. Residential | 4.1 | 4.7 | 7.6 | 6.5 | 7.3 |
U.S. Power Plant | 36.8 | 35.9 | 31.7 | 30.8 | 30.9 |
U.S. Industrial | 21.8 | 22.1 | 22.7 | 22.3 | 22.3 |
U.S. Plant Fuel | 5.0 | 5.0 | 5.0 | 5.0 | 5.0 |
U.S. Pipe Distribution | 2.0 | 2.0 | 2.0 | 2.0 | 2.0 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 74.8 | 75.1 | 75.8 | 72.9 | 74.5 |
Total U.S. Demand | 95.4 | 96.0 | 97.4 | N/A | 92.7 |
N/A is Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam | 2025 Current Day % of Normal Forecast | 2025 Prior Day % of Normal Forecast | 2024 % of Normal Actual | 2023 % of Normal Actual | 2022 % of Normal Actual |
Apr-Sep | 93 | 93 | 74 | 83 | 107 |
Jan-Jul | 86 | 87 | 76 | 77 | 102 |
Oct-Sep | 88 | 88 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Oct 11 | Week ended Oct 4 | 2023 | 2022 | 2021 | |
Wind | 8 | 8 | 10 | 11 | 10 |
Solar | 5 | 6 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 2 | 2 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 45 | 45 | 41 | 38 | 37 |
Coal | 16 | 16 | 17 | 21 | 23 |
Nuclear | 18 | 18 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.39 | 2.51 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.72 | 1.68 | |||
PG&E Citygate NG-CG-PGE-SNL | 4.67 | 4.61 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.61 | 1.54 | |||
Chicago Citygate NG-CG-CH-SNL | 2.50 | 2.40 | |||
Algonquin Citygate NG-CG-BS-SNL | 2.08 | 1.83 | |||
SoCal Citygate NG-SCL-CGT-SNL | 3.34 | 3.60 | |||
Waha Hub NG-WAH-WTX-SNL | 2.35 | 0.64 | |||
AECO NG-ASH-ALB-SNL | 1.18 | 0.96 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 43.00 | 43.25 | |||
PJM West EL-PK-PJMW-SNL | 41.25 | 43.75 | |||
Ercot North EL-PK-ERTN-SNL | 28.00 | 40.50 | |||
Mid C EL-PK-MIDC-SNL | 40.00 | 73.00 | |||
Palo Verde EL-PK-PLVD-SNL | 54.75 | 52.75 | |||
SP-15 EL-PK-SP15-SNL | 49.25 | 48.50 |
Reporting by Scott DiSavino, Editing by Nick Zieminski
For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.
For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminal
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SNL U.S. gas prices, see: 0#SNL-NG
For next-day SNL U.S. power prices, see: 0#SNL-PWR
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/
For U.S. Northwest hydro power report, see: NWRFC
For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
For the U.S. natural gas speed guide, see: USGAS
For the U.S. power speed guide, see: USPOWER
To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)
NYMEX Henry Hub options and futures combined 0#3CFTC023651
NYMEX Henry Hub futures only 0#1CFTC023651
ICE Henry Hub options and futures combined 0#3CFTC023391
NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B
NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C
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