Warmer than normal weather triggers air conditioning demand.
Front-month gas futures for August delivery on the New York Mercantile Exchange rose 5.3 cents, or 2.3%, to $2.32 per million British thermal units (mmBtu) at 10:38 a.m. EDT. The contract dropped to its lowest since May 13 earlier in the session.
“We are trying to rebound on the expectations that the outlook going forward is going to be better,” said Phil Flynn, an analyst at Price Futures Group, adding that, because of the potential demand destruction due to the storm Beryl and a bearish weekly inventory report that showed that production and supplies came in the higher than anticipated it’s almost amazing that the market is holding up as well.
“On the flip side of that, there are some people that are calling for a return to some hot weather in the coming weeks and that may give the market some support.”
Financial firm LSEG estimated 257 cooling degree days (CDDs) over the next two weeks in the Lower 48 U.S. states, slightly higher from the 252 CDDs estimated on Thursday. The normal is 204 HDDs for this time of year.
LSEG forecast average gas demand in the Lower 48, including exports, at 107.1 billion cubic feet per day (bcfd) this week, before easing to 106.2 bcfd next week.
LSEG said gas output in the Lower 48 has risen to an average of 102.1 billion cubic feet per day (bcfd) in July, up from an average of 100.2 bcfd in June and a 17-month low of 99.5 bcfd in May. U.S. output hit a monthly record high of 105.5 bcfd in December 2023.
Data from the U.S. Energy Information Administration on Wednesday indicated that utilities added 65 billion cubic feet (bcf) of gas into storage during the week ended July 5.
That was more than the 55-bcf build analysts forecast in a Reuters poll and compares with an increase of 57 bcf in the same week last year and a five-year (2019-2023) average rise of 57 bcf for this time of year.
That build boosted the amount of gas in storage to around 19% above normal levels for this time of year.
Week ended Week ended Year ago Five-year
July 5 June 28 July 5 average
Actual Actual July 5 U.S. weekly natgas storage change (bcf): +65 +32 +57 +57 U.S. total natgas in storage (bcf): 3,199 3,134 2,915 2,695 U.S. total storage versus 5-year average 18.7% 18.8%
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 2.26 2.31 2.64 2.66 3.60 Title Transfer Facility (TTF) 10.04 9.92 9.58 13.04 14.39 Japan Korea Marker (JKM) 12.37 12.35 11.44 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 3 3 3 U.S. GFS CDDs 257 252 204 U.S. GFS TDDs 260 255 207
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 102.1 101.6 101.4 102.1 95.5 U.S. Imports from Canada 8.2 7.8 7.5 N/A 7.8 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 110.3 109.4 108.9 N/A 112.5
U.S. Demand (bcfd) U.S. Exports to Canada 1.4 1.5 1.4 N/A 2.3 U.S. Exports to Mexico 6.8 6.9 6.8 N/A 6.1 U.S. LNG Exports 11.7 11.5 12.4 13.0 8.6 U.S. Commercial 4.3 4.4 4.4 4.4 4.5 U.S. Residential 3.5 3.5 3.6 3.6 3.6 U.S. Power Plant 49.7 50.2 48.5 44.5 43.3 U.S. Industrial 21.6 21.7 21.7 21.3 21.3 U.S. Plant Fuel 5.0 5.0 5.0 5.1 4.9 U.S. Pipe Distribution 2.3 2.3 2.3 2.3 2.2 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 86.6 87.2 85.6 81.3 79.9 Total U.S. Demand 106.4 107.1 106.2 N/A 96.9
N/A is Not Available
U.S. weekly power generation percent by fuel – EIA
Week ended Week ended 2023 2022 2021
Jul 12 Jul 5 Wind 5 9 10 11 10 Solar 5 6 4 3 3 Hydro 6 6 6 6 7 Other 1 1 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 48 43 41 38 37 Coal 18 17 17 21 23 Nuclear 17 18 19 19 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.23 2.40 Transco Z6 New York 1.63 1.80 PG&E Citygate 3.13 3.40 Eastern Gas (old Dominion South) 1.47 1.56 Chicago Citygate 1.83 1.84 Algonquin Citygate 1.78 1.92 SoCal Citygate 2.59 2.97 Waha Hub 0.81 1.55 AECO 1.06 0.95
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 46.25 56.00 PJM West 49.50 37.75 Ercot North 25.25 29.50 Mid C 84.00 145.00 Palo Verde 80.00 115.50 SP-15 63.50 96.75
(Reporting by Daksh Grover, Rahul Paswan and Brijesh Patel in Bengaluru; editing by David Evans)