US Natgas Prices Jump 5% to 1-Week High on Hotter Weather Forecasts, Rising LNG Exports

(Reuters) – U.S. natural gas futures jumped about 5% to a one-week high on Monday on forecasts for hotter weather over the next two weeks than previously expected and rising flows of gas to liquefied natural gas (LNG) export plants.

Front-month gas futures for August delivery on the New York Mercantile Exchange rose 15.2 cents, or 4.6%, to settle at $3.466 per million British thermal units, their highest close since July 2.

That price increase occurred despite rising output and forecasts for lower demand over the next two weeks than previously expected.

Even though gas futures have dropped about 14% over the past three weeks, speculators last week boosted their net long futures and options positions on the New York Mercantile Exchange and Intercontinental Exchange to their highest levels since early April, the U.S. Commodity Futures Trading Commission’s Commitments of Traders report showed.

The U.S. National Hurricane Center said a tropical system off the east coast of Florida has about a 30% chance of strengthening into a tropical cyclone as it moves west into the Gulf of Mexico off Louisiana, Mississippi, Alabama and Florida over the next week.

Analysts have noted that tropical storms in the Gulf can knock some production out of service, but noted that only about 2% of all U.S. gas output comes from the federal offshore Gulf of Mexico.

The analysts noted that storms were more likely to be demand-destroying events that leave homes and businesses without power and can shut LNG export plants.

Meteorologists slightly reduced their forecasts for hotter weather for this week but continued to project the Lower 48 U.S. states will remain mostly warmer than normal through at least July 29, especially in late July.

Even though the weather has remained above normal so far this summer, analysts expect energy firms to keep injecting more gas into storage than usual in coming weeks. That’s because output hit a record high in June and was on track to top that in July, while gas flows to LNG export plants have so far languished since hitting a record in April.

There is currently about 6% more gas in storage than the five-year (2020-2024) normal for this time of year, and analysts expect that surplus to grow in coming weeks. Some analysts, however, noted that an expected rise in LNG exports should start to chip away at that surplus later this year.

SUPPLY AND DEMAND

LSEG said average gas output in the Lower 48 rose to 106.8 billion cubic feet per day so far in July, up from a monthly record high of 106.4 bcfd in June.

LSEG forecast average gas demand in the Lower 48, including exports, would slide from 107.8 bcfd this week to 106.8 bcfd next week. Those forecasts were lower than LSEG’s outlook on Friday.

The average amount of gas flowing to the eight big U.S. LNG export plants rose to 15.8 bcfd so far in July as liquefaction units at some plants slowly exited maintenance reductions and unexpected outages. That was up from 14.3 bcfd in June and 15.0 bcfd in May, but remained below the monthly record high of 16.0 bcfd in April.

On a daily basis, LNG export feedgas was on track to rise to a three-month high of 16.6 bcfd on Monday with flows to U.S. energy company Venture Global LNG’s 3.2-bcfd Plaquemines plant in Louisiana up to a record 2.9 bcfd on Sunday, according to LSEG data.

Week ended Jul 11 Forecast	Week ended Jul 4 Actual	Year ago Jul 11	Five-year average Jul 11
U.S. weekly natgas storage change (bcf):	+45	+53	+18	+41
U.S. total natgas in storage (bcf):	3,051	3,006	3,208	2,874
U.S. total storage versus 5-year average	+6.2%	+6.1%
Global Gas Benchmark Futures ($ per mmBtu)	Current Day	Prior Day	This Month Last Year	Prior Year Average 2024	Five-Year Average (2019-2023)
Henry Hub	3.49	3.31	2.21	2.41	3.52
Title Transfer Facility (TTF) (TRNLTTFMc1)	12.39	12.21	10.32	10.95	15.47
Japan Korea Marker (JKM) (JKMc1)	13.12	13.13	12.32	11.89	15.23
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	4	3	3	3	3
U.S. GFS CDDs	242	233	218	213	203
U.S. GFS TDDs	246	236	221	216	206
LSEG U.S. Weekly GFS Supply and Demand Forecasts
	Prior Week	Current Week	Next Week	This Week Last Year	Five-Year (2020-2024)Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production	106.5	105.8	105.2	103.3	97.8
U.S. Imports from Canada	8.2	7.9	7.7	N/A	7.8
U.S. LNG Imports	0.0	0.0	0.0	0.0	0.1
Total U.S. Supply	114.7	113.7	112.9	N/A	105.7
U.S. Demand (bcfd)
U.S. Exports to Canada	2.0	2.0	2.0	N/A	2.3
U.S. Exports to Mexico	7.0	6.6	6.5	N/A	6.4
U.S. LNG Export Feedgas	15.2	15.6	15.5	11.1	10.0
U.S. Commercial	4.3	4.4	4.4	4.4	4.7
U.S. Residential	3.6	3.5	3.6	3.6	3.5
U.S. Power Plant	45.2	46.0	45.2	49.0	48.1
U.S. Industrial	22.2	22.2	22.2	21.8	21.7
U.S. Plant Fuel	5.3	5.2	5.2	5.3	5.4
U.S. Pipe Distribution	2.2	2.2	2.2	2.2	3.3
U.S. Vehicle Fuel	0.1	0.1	0.1	0.1	0.2
Total U.S. Consumption	82.9	83.7	82.9	86.4	86.9
Total U.S. Demand	107.1	107.8	106.8	N/A	99.2
N/A is Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)	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	76	76	74	83	107
Jan-Jul	76	78	76	77	102
Oct-Sep	80	79	77	76	103
U.S. weekly power generation percent by fuel – EIA
	Week ended Jul 18	Week ended Jul 11	2024	2023	2022
Wind	6	7	11	10	11
Solar	7	7	5	4	3
Hydro	5	5	6	6	6
Other	1	1	1	2	2
Petroleum	0	0	0	0	0
Natural Gas	45	44	42	41	38
Coal	19	19	16	17	21
Nuclear	17	17	19	19	19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub	Current Day	Prior Day
Henry Hub (NG-W-HH-SNL)	3.22	3.11
Transco Z6 New York (NG-CG-NY-SNL)	2.75	2.81
PG&E Citygate (NG-CG-PGE-SNL)	3.38	3.49
Eastern Gas (old Dominion South) (NG-PCN-APP-SNL)	2.58	2.64
Chicago Citygate (NG-CG-CH-SNL)	2.98	2.88
Algonquin Citygate (NG-CG-BS-SNL)	3.57	3.02
SoCal Citygate (NG-SCL-CGT-SNL)	3.76	3.97
Waha Hub (NG-WAH-WTX-SNL)	1.47	1.77
AECO (NG-ASH-ALB-SNL)	0.76	0.82
ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day
New England (E-NEPLMHP-IDX)	76.50	56.77
PJM West (E-PJWHDAP-IDX)	66.86	65.49
Mid C (W-MIDCP-IDX)	57.15	56.35
Palo Verde (W-PVP-IDX)	53.58	51.77
SP-15 (W-SP15-IDX)	38.49	36.95

Reporting by Scott DiSavino; Editing by Paul Simao and Deepa Babington

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