By Scott DiSavino

(Reuters) – U.S. natural gas futures eased about 1% on Monday on a small increase in output over the weekend and forecasts for less demand over the next two weeks than previously expected.

That small output increase came as some drillers restarted their Gulf of Mexico production now that Hurricane Helene passed through the area.

The decline in demand, meanwhile, was due in part to a reduction in the amount of gas power generators will likely burn with over two million homes and businesses still without power in the U.S. Southeast and Midwest after Helene battered the region late last week.

Front-month gas futures for November delivery on the New York Mercantile Exchange fell 1.9 cents, or 0.7%, to $2.883 per million British thermal units at 9:02 a.m EDT (1302 GMT). On Friday the contract closed at its highest since June 18.

Despite the small decline, the front-month remained in technically overbought territory for a second day in a row for the first time since May.

For the month, the contract was up about 36%, the most in a month since July 2022.

For the quarter, the front-month was up about 11% after jumping 48% last quarter.

With gas futures up about 45% over the past five weeks, speculators boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for a fourth week in a row to their highest since early July, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report.

In Canada, meanwhile, next-day gas prices at the AECO hub in Alberta fell to 4 cents per mmBtu, their lowest since hitting a record low of around 2 cents in August 2022, according to data from financial firm LSEG going back to 1993.

SUPPLY AND DEMAND

LSEG said gas output in the Lower 48 U.S. states fell to an average of 102.1 bcfd so far in September, down from 103.2 bcfd in August. That compares with a record 105.5 bcfd in December 2023.

The average output for September, however, was higher than seen last week as some Gulf of Mexico production returned to service.

LSEG forecast average gas demand in the Lower 48 states, including exports, will rise from 95.9 bcfd this week to 96.6 bcfd next week. Those forecasts were lower than LSEG’s outlook on Friday.

Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants eased to an average of 12.7 bcfd so far in September, down from 12.9 bcfd in August. 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.

The U.S. became the world’s biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices feed demand for more exports due in part to supply disruptions and sanctions linked to Russia’s invasion of Ukraine.

Gas prices were trading around a six-week high of $13 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and a one-week high of $13 at the Japan Korea Marker (JKM) benchmark in Asia. [NG/EU]

  Week ended Week ended Year ago Five-year  

Sep 27 Sep 20 Sep 27 average

Actual Actual Sep 27

U.S. weekly natgas storage change (bcf): +60 +47 +87 +98

U.S. total natgas in storage (bcf): 3,552 3,492 3,420 3,357

U.S. total storage versus 5-year average 5.8% 7.1%    

           

           

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

Last Year Average Average

2023 (2018-2022)

Henry Hub 2.93 2.90 2.70 2.66 3.60

Title Transfer Facility (TTF) 12.68 12.47 11.44 13.04 14.39

Japan Korea Marker (JKM) 13.21 13.19 13.92 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 30-Year Norm

Norm

U.S. GFS HDDs 50 51 65 77 94

U.S. GFS CDDs 94 97 75 75 61

U.S. GFS TDDs 144 148 130 152 155

           

LSEG U.S. Weekly GFS Supply and Demand Forecasts          

  Prior Week Current Next Week This Week Five-Year

Week Last Year (2019-2023)

Average For

Month

U.S. Supply (bcfd)          

U.S. Lower 48 Dry Production 101.8 102.2 102.2 102.3 96.5

U.S. Imports from Canada 7.9 7.6 7.4 N/A 7.1

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0

Total U.S. Supply 109.7 109.9 109.6 N/A 103.6

           

U.S. Demand (bcfd)          

U.S. Exports to Canada 1.9 2.0 1.9 N/A 2.3

U.S. Exports to Mexico 6.2 6.1 6.8 N/A 6.0

U.S. LNG Exports 12.3 12.4 13.0 12.7 8.2

U.S. Commercial 4.8 4.9 5.3 5.0 4.9

U.S. Residential 4.0 4.0 4.7 4.2 3.9

U.S. Power Plant 40.2 37.2 35.6 35.4 36.0

U.S. Industrial 21.9 21.9 22.1 21.7 21.7

U.S. Plant Fuel 5.0 5.0 5.0 5.0 5.1

U.S. Pipe Distribution 2.1 2.0 2.0 2.0 2.2

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

Total U.S. Consumption 78.1 75.3 74.9 73.4 80.0

Total U.S. Demand 98.5 95.9 96.6 N/A 90.4

           

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021 %

% of Normal % of Normal % of Normal % of Normal of Normal

Forecast Forecast Actual Actual Actual

Apr-Sep  74 74 83 107 81

Jan-Jul 76 76 77 102 79

Oct-Sep 77 78 76 103 81

           

           

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

  Week ended Week ended 2023 2022 2021

Oct 4 Sep 27

Wind 7 7 10 11 10

Solar 4 5 4 3 3

Hydro 5 5 6 6 7

Other 1 1 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 44 46 41 38 37

Coal 18 18 17 21 23

Nuclear 20 18 19 19 20

           

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

Hub Current Day Prior Day      

Henry Hub 2.53 2.64    

Transco Z6 New York 1.28 1.23    

PG&E Citygate 3.05 3.00    

Eastern Gas (old Dominion South) 1.32 1.21    

Chicago Citygate 2.35 2.52    

Algonquin Citygate 1.55 1.65    

SoCal Citygate 2.55 2.47    

Waha Hub 0.96 1.39

AECO 0.04 0.07    

         

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

Hub Current Day Prior Day      

New England 32.25 36.50  

PJM West 43.25 37.00  

Ercot North 21.50 25.25    

Mid C 49.25 50.50

Palo Verde 29.50 36.00    

SP-15 28.25 34.75    

(Reporting by Scott DiSavino; Editing by Andrea Ricci)

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