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U.S. natgas posts best day in two weeks on rising cooling demand


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These translations are done via Google Translate
Aug 3 (Reuters) – U.S. natural gas futures gained on Tuesday, registering their biggest daily gain in two weeks, as forecasts continued to signal hotter weather over the coming weeks, which tends to increase gas demand for cooling.

Front-month gas futures settled at $4.027 per million British thermal units, with a gain of 9.2 cents, or 2.3%, their most since July 20.

“We’ve got some hot weather in most of the gas-consuming regions of the U.S., and the market will stay strong as long as the weather remains hot,” said Thomas Saal, senior vice president of energy at StoneX.

“With higher gas prices outside the U.S., LNG exports should remain elevated, while supply ramps up at a slower pace than before, keeping the market tight.”

Data provider Refinitiv projected U.S. demand, including exports, will rise from an average of 90.8 billion cubic feet per day (bcfd) this week to 95 bcfd next week.

The amount of gas flowing to U.S. LNG export plants averaged 10.8 bcfd in July, up from 10.1 bcfd in June but still below April’s 11.5-bcfd record.

Refinitiv said average U.S. production would increase slightly to 92.3 bcfd next week from 92 bcfd this week. That is still well below November’s all-time monthly high of 95.4 bcfd.

With European gas prices near record levels and Asian gas trading over $15 per mmBtu, analysts expect U.S. LNG exports to remain elevated this year.

“The bulls are taking a breath after running up the prices, waiting for other market signal to go even higher,” said Zhen Zhu, economist at Oklahoma City-based C.H. Guernsey.

Zhu said some fundamental reasons for the high prices include higher demand due to summer heat, a forecasted very active storm season, a large storage deficit and record gas exports (both the LNG and pipeline exports).

Week ended Jul 30(Forecast)
Week ended Jul 23 (Actual)
Year ago Jul 30
Five-year average Jul 30
U.S. weekly natgas storage change (bcf):
24
36
32
30
Global Gas Benchmark Futures ($ per mmBtu)
Current Day
Prior Day
This Month Last Year
Prior Year Average 2020
Five Year Average (2016-2020)
Henry Hub
4.012
4.036
2.13
2.66
Title Transfer Facility (TTF)
14.44
14.52
3.24
5.19
Japan Korea Marker (JKM)
15.47
14.76
4.22
6.49
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
1
2
1
4
4
U.S. GFS CDDs
233
228
213
200
196
U.S. GFS TDDs
234
230
214
204
200
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
91.9
92
92.3
89.7
U.S. Imports from Canada
7.2
7
7.2
U.S. LNG Imports
0
0
0
0
Total U.S. Supply
99.2
99
99.4
U.S. Demand (bcfd)
U.S. Exports to Canada
2.1
2.2
2.2
2.1
U.S. Exports to Mexico
6.5
6.1
6.5
5.7
U.S. LNG Exports
10.8
10.6
10.7
4.1
U.S. Commercial
4.4
4.4
4.4
4.4
U.S. Residential
3.5
3.5
3.5
3.6
U.S. Power Plant
40.9
36.5
39.9
39.7
U.S. Industrial
20.8
20.9
21
21.4
U.S. Plant Fuel
4.5
4.5
4.6
U.S. Pipe Distribution
2
1.9
2
1.9
U.S. Vehicle Fuel
0.1
0.1
0.1
0.1
Total U.S. Consumption
76.3
71.9
75.6
Total U.S. Demand
95.7
90.8
95
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub
Current Day
Prior Day
Henry Hub
4.02
3.94
Transco Z6 New York
3.24
2.9
PG&E Citygate
5.56
5.41
Dominion South
3.14
2.86
Chicago Citygate
3.85
3.7
Algonquin Citygate
3.32
3
SoCal Citygate
8.05
7.61
Waha Hub
3.81
3.59
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
Prior Day
New England
35.5
30.5
PJM West
32.75
29.5
Ercot North
41.75
69.75
Mid C
138.8
145
Palo Verde
119.6
96.27
SP-15
97.5
107.25
Reporting by Nakul Iyer in Bengaluru, additional reporting by Swati Verma; editing by Jonathan Oatis and Marguerita Choy


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