U.S. natgas closes up 2%, then jumps 5% on colder forecast

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U.S. natural gas futures gained about 2% on Monday on expectations utilities will

inject less gas than usual into storage in coming weeks, then gas futures jumped 5% after the market closed on

colder weather forecasts.

“Prices look set to increase further in the short term, with domestic demand rising as a cold snap is

forecasted for much of the U.S., particularly in the Northeast,” said Nikoline Bromander, senior analyst at

Rystad Energy.

U.S. front-month gas futures rose 13.5 cents, or 2.1%, to settle at $6.669 per million British

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thermal units (mmBtu). On Friday, the contract closed at its lowest since April 8.

Last week, prices fell about 10% as U.S. gas speculators cut their net long futures and options positions

on the New York Mercantile and Intercontinental Exchanges for the first time in five weeks, according to the

U.S. Commodity Futures Trading Commission’s Commitments of Traders report.

U.S. gas futures are up about 85% so far this year as much higher prices in Europe have kept demand for

U.S. liquefied natural gas (LNG) exports near record highs since Russia invaded Ukraine on Feb. 24. Gas prices

in Europe were trading around $29 per mmBtu.

The U.S. gas market remains mostly shielded from higher global prices because the United States is the

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world’s top gas producer, with all the fuel it needs for domestic use while capacity constraints inhibit

exports of more LNG no matter how high global prices rise.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 94.4 billion cubic

feet per day (bcfd) so far in April from 93.7 bcfd in March. That compares with a monthly record of 96.3 bcfd

in December 2021.

On a daily basis, output was on track to drop about 2.3 bcfd over the past two days to a preliminary 93.1

bcfd on Monday, its lowest since mid-March. Most of those declines were in North Dakota. Preliminary data is

often revised.

The amount of gas flowing to U.S. LNG export plants slid from a record 12.9 bcfd in March to 12.2 bcfd so

far in April due mostly to declines at Freeport LNG’s facility in Texas. The United States can turn about 13.2

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bcfd of gas into LNG.

Since the United States will not be able to produce more LNG anytime soon, the country worked with allies

to divert more LNG exports to Europe to help European Union countries and others break their dependence on

Russian gas.

Russia, the world’s second biggest gas producer, provided about 30%-40% of Europe’s gas in 2021, totaling

about 18.3 bcfd.

The EU wants to cut Russian gas imports by two-thirds by the end of 2022 and refill stockpiles to 80% of

capacity by Nov. 1, 2022 and 90% by Nov. 1 each year from 2023.

Gas stockpiles in Western Europe – Belgium, France, Germany and the Netherlands – were

about 23% below the five-year (2017-2021) average for this time of year, according to Refinitiv.

That is about 28% of full capacity and compares with U.S. inventories about 17% below their five-year

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norm.

Week ended Week ended Year ago Five-year

Apr 22 Apr 15 Apr 22 average

(Forecast) (Actual) Apr 22

U.S. weekly natgas storage change (bcf): +24 +53 +18 +53

U.S. total natgas in storage (bcf): 1,474 1,450 1,896 1,795

U.S. total storage versus 5-year average -17.9% -16.8%

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 6.51 6.53 2.69 3.73 2.89

Title Transfer Facility (TTF) 30.73 30.67 7.15 16.04 7.49

Japan Korea Marker (JKM) 25.50 25.29 7.80 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 108 126 102 108 106

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U.S. GFS CDDs 62 50 55 53 52

U.S. GFS TDDs 170 176 157 161 158

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 94.2 94.4 94.9 91.9 84.8

U.S. Imports from Canada 8.2 8.4 8.1 7.6 7.8

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 102.4 102.8 103.0 99.5 92.7

U.S. Demand (bcfd)

U.S. Exports to Canada 2.6 3.1 3.0 2.4 2.6

U.S. Exports to Mexico 6.4 6.1 5.9 6.1 4.6

U.S. LNG Exports 12.0 12.1 12.1 11.4 5.2

U.S. Commercial 9.3 7.5 6.6 6.8 8.3

U.S. Residential 13.2 9.6 7.9 8.4 11.8

U.S. Power Plant 25.4 25.2 26.5 25.7 24.0

U.S. Industrial 22.8 22.1 21.8 22.1 22.0

U.S. Plant Fuel 4.7 4.7 4.7 4.7 4.6

U.S. Pipe Distribution 2.1 1.9 1.8 1.9 2.2

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U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

Total U.S. Consumption 77.5 71.2 69.5 69.7 73.0

Total U.S. Demand 98.6 92.4 90.5 89.6 85.4

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

Week ended Week ended Week ended Week ended Week ended

Apr 29 Apr 22 Apr 15 Apr 8 Apr 1

Wind 20 16 17 15 15

Solar 4 4 4 4 4

Hydro 6 7 7 8 8

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 29 33 32 33 32

Coal 18 19 19 19 19

Nuclear 19 19 19 19 20

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

Hub Current Day Prior Day

Henry Hub 6.59 6.88

Transco Z6 New York 5.71 6.18

PG&E Citygate 7.45 7.80

Dominion South 5.60 5.97

Chicago Citygate 6.35 6.57

Algonquin Citygate 5.92 7.25

SoCal Citygate 6.50 7.28

Waha Hub 6.20 6.37

AECO 5.17 5.99

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

Hub Current Day

New England 58.50 65.25

PJM West 40.75 44.25

Ercot North 59.50 48.00

Mid C 80.75 69.25

Palo Verde 88.00 44.25

SP-15 73.25 52.75

(Reporting by Scott DiSavino; editing by John Stonestreet, Tomasz Janowski and David Gregorio)