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U.S. natural gas futures jumped about 7% to a 13-year high on Monday on forecasts for
hotter weather and higher demand than previously expected, a decline in output, rising liquefied natural gas
(LNG) exports and record power demand in Texas.
Power demand in Texas is set to break the all-time record this week, far ahead of the hottest days of
summer, testing the resilience of the state’s power grid after issues earlier this year and last year’s
days-long blackout during a deep freeze.
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Front-month gas futures for July delivery rose 63.3 cents, or 7.4%, to $9.156 per million British
thermal units (mmBtu) at 10:08 a.m. EDT (1408 GMT), putting the contract on track for its highest close since
August 2008.
Despite the jump in prices this week, speculators last week cut their net long futures and options
positions on the New York Mercantile and Intercontinental Exchanges to their lowest since April 2020,
according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report.
U.S. gas futures were up about 142% so far this year, as much higher prices in Europe and Asia keep demand
for U.S. liquefied natural gas (LNG) exports strong, especially since Russia’s Feb. 24 invasion of Ukraine
stoked fears that Moscow might cut gas supplies to Europe.
Gas was trading around $26 per mmBtu in Europe and $24 in Asia.
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U.S. futures lag far behind global prices because the United States is the world’s top producer with all
the gas it needs for domestic use, while capacity constraints inhibit additional LNG exports.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell to 94.7 billion cubic
feet per day (bcfd) so far in June from 95.1 bcfd in May. That compares with a monthly record of 96.1 bcfd in
December 2021.
With the coming of hotter summer weather, Refinitiv projected that average U.S. gas demand, including
exports, would rise from 87.1 bcfd this week to 90.0 bcfd next week to keep more air conditioners humming. The
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forecasts for this week was higher than Refinitiv’s outlook on Friday.
The average amount of gas flowing to U.S. LNG export plants rose to 12.8 bcfd so far in June from 12.5
bcfd in May. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.6
bcfd of gas into LNG.
The United States, which will not be able to produce much more LNG anytime soon, has worked with allies to
divert exports from elsewhere to Europe to help European Union countries and others break dependence on
Russian gas.
Russia kept pipeline exports to Europe at around 6.8 bcfd on Sunday and Saturday on the three mainlines
into Germany: North Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the
Russia-Ukraine-Slovakia-Czech Republic-Germany route. That compares with an average of 11.6 bcfd in June 2021.
Gas stockpiles in Northwest Europe – Belgium, France, Germany and the Netherlands – were
about 9% below the five-year (2017-2021) average for this time of year, and down from 39% below the five-year
norm in mid-March, according to Refinitiv. Storage was currently about 46% of full capacity.
That is healthier than U.S. inventories, which were around 15% below their five-year norm.
Week ended Week ended Year ago Five-year
Jun 3 May 27 Jun 3 average
(Forecast) (Actual) Jun 3
U.S. weekly natgas storage change (bcf): +96 +90 +98 +100
U.S. total natgas in storage (bcf): 1,998 1,902 2,397 2,339
U.S. total storage versus 5-year average -14.6% -15.1%
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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 8.98 8.52 3.27 3.73 2.89
Title Transfer Facility (TTF) 26.44 26.23 10.27 16.04 7.49
Japan Korea Marker (JKM) 24.02 24.02 11.58 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 8 12 5 15 18
U.S. GFS CDDs 186 166 182 150 144
U.S. GFS TDDs 194 178 187 165 162
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 95.5 94.7 95.0 93.1 84.6
U.S. Imports from Canada 7.4 7.5 7.4 7.8 7.7
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 102.9 102.2 102.4 99.9 92.4
U.S. Demand (bcfd)
U.S. Exports to Canada 2.7 2.7 2.7 2.2 2.2
U.S. Exports to Mexico 6.0 6.0 6.1 6.7 5.1
U.S. LNG Exports 12.8 12.7 12.5 9.2 4.3
U.S. Commercial 4.6 4.5 4.4 4.5 4.7
U.S. Residential 4.1 3.7 3.6 3.8 4.3
U.S. Power Plant 28.2 30.1 33.1 36.1 32.8
U.S. Industrial 20.7 20.7 20.9 20.6 20.9
U.S. Plant Fuel 4.7 4.7 4.7 4.7 4.7
U.S. Pipe Distribution 1.7 1.7 1.8 1.7 1.8
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 64.2 65.7 68.7 71.5 69.3
Total U.S. Demand 85.7 87.1 90.0 89.6 80.9
U.S. weekly power generation percent by fuel – EIA
Week ended Week ended Week ended Week ended Week ended
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Jun 10 Jun 3 May 27 May 20 May 13
Wind 8 12 12 12 15
Solar 6 4 4 4 4
Hydro 8 7 7 7 7
Other 2 2 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 39 36 37 37 34
Coal 21 19 20 20 18
Nuclear 21 19 19 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 8.34 8.89
Transco Z6 New York 7.26 7.51
PG&E Citygate 9.13 9.93
Dominion South 7.17 7.65
Chicago Citygate 7.86 8.42
Algonquin Citygate 7.97 8.37
SoCal Citygate 8.70 9.05
Waha Hub 7.83 8.20
AECO 6.17 6.45
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day
New England 68.25 87.75
PJM West 70.25 85.25
Ercot North 62.75 78.00
Mid C 35.25 45.38
Palo Verde 43.00 63.00
SP-15 43.25 63.25
(Reporting by Scott DiSavino; Editing by Mark Porter)
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