U.S. natural gas futures rose more than 4% on Wednesday, supported by a drop in output and forecasts of hotter weather for the second half of August that could boost cooling demand and increase gas consumption by power generators to meet air conditioning needs.
Front-month gas futures for September delivery on the New York Mercantile Exchange rose 10 cents, or about 4.7%, to $2.25 per million British thermal units, at 9:58 a.m. EDT (1358 GMT).
“We’ve had some moderation of weather models that have seemed to have reversed. We’re starting to add some cooling degree days to the second half of August. So, that’s been a bit of a help,” said Robert DiDona of Energy Ventures Analysis.
Financial firm LSEG estimated 224 cooling degree days (CDDs) over the next two weeks, slightly lower than the 233 CDDs estimated on Tuesday. The normal for this time of year is 186 CDDs.
LSEG forecast average gas demand in the Lower 48 U.S. states, including exports, to rise from 105.9 billion cubic feet per day (bcfd) this week to 107.5 bcfd next week.
“All data vendors are showing that there has been decline over the past week in production and that has certainly tightened balances for the short term, which will mean that there’s less gas going into the ground during this injection season, and that has helped to create a little bit of upside,” DiDona said.
LSEG said gas output in the Lower 48 has fallen to an average of 102.6 billion cubic feet per day (bcfd) so far in August, down from 103.4 bcfd in July. That compares with a monthly record high of 105.5 bcfd in December 2023.
While the steady narrowing in the gas surplus will not cause a spike in prices independently on any given day or week, it will provide a bullish backdrop capable of accentuating price response to any unexpected supply disruptions or one more round of broad-based heat before this summer ends, energy advisory firm Ritterbusch and Associates said in a note.
Elsewhere, intense fighting between Ukrainian and Russian forces near a pipeline Russia uses to supply European countries with gas has not disrupted supplies, network operators and gas companies said on Tuesday.
Dutch and British gas wholesale prices were little changed on Wednesday morning amid flat demand and steady flows.
Week ended Week ended Year ago Five-year
Aug 9 Aug 2 Aug 2 average
forecasts Actual Aug 2 U.S. weekly natgas storage change (bcf): +19 +21 +25 +38 U.S. total natgas in storage (bcf): 3,289 3,270 2,022 2,846 U.S. total storage versus 5-year average 13.8% 14.9%
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 2.65 2.66 3.60
2.18 2.23
Title Transfer Facility (TTF) 11.21 13.04 14.39
12.70 12.91
Japan Korea Marker (JKM) 12.43 14.39 14.31
12.66 12.63
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
6 7 1 2 3
U.S. GFS CDDs
224 233 214 192 186
U.S. GFS TDDs-
230 240 215 194 189
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 102.3 96.3
103.1 101.8 102.1
U.S. Imports from Canada N/A 7.3
8.0 7.6 7.5
U.S. LNG Imports 0.0 0.1
0.0 0.0 0.0
Total U.S. Supply N/A 103.7
111.0 109.3 109.6
U.S. Demand (bcfd) U.S. Exports to Canada N/A 2.3
1.6 1.6 1.6
U.S. Exports to Mexico N/A 6.1
7.0 7.1 7.1
U.S. LNG Exports 12.6 7.7
12.9 12.7 12.6
U.S. Commercial 4.4 4.5
4.4 4.5 4.5
U.S. Residential 3.5 3.4
3.7 3.7 3.8
U.S. Power Plant 48.3 43.0
50.7 47.0 48.4
U.S. Industrial 21.3 21.7
21.9 21.8 21.9
U.S. Plant Fuel 5.0 5.1
5.1 5.0 5.0
U.S. Pipe Distribution 2.2 2.2
2.3 2.2 2.3
U.S. Vehicle Fuel 0.1 0.1
0.1 0.1 0.1
Total U.S. Consumption 84.8 80.0
88.3 84.5 86.1
Total U.S. Demand N/A 96.1
109.9 105.9 107.5
N/A is Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021
% of Normal % of Normal % of Normal % of Normal % of Normal
Forecast Forecast Actual Actual Actual Apr-Sep 74 74 83 107 81 Jan-Jul 76 76 77 102 79 Oct-Sep 77 78 76 103 81
U.S. weekly power generation percent by fuel – EIA
2023 2022 2021
Week ended Week ended
Aug 16 Aug 9
Wind 10 11 10
8 6
Solar 4 3 3
6 5
Hydro 6 6 7
6 5
Other 2 2 2
1 1
Petroleum 0 0 0
0 0
Natural Gas 41 38 37
45 47
Coal 17 21 23
17 18
Nuclear 19 19 20
18 17
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub
Current Day Prior Day
Henry Hub
2.16 2.10
Transco Z6 New York
1.61 1.46
PG&E Citygate
2.83 2.78
Eastern Gas (old Dominion South)
1.49 1.41
Chicago Citygate
1.77 1.80
Algonquin Citygate
1.66 1.60
SoCal Citygate
1.93 2.04
Waha Hub
0.30 -1.30
AECO
0.71 0.74
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub
Current Day Prior Day
New England
37.50 30.75
PJM West
38.00 36.00
Ercot North
29.50 26.50
Mid C
35.50 30.25
Palo Verde
32.25 29.50
SP-15
31.50 30.50
(Reporting by Sherin Elizabeth Varghese; editing by Jonathan Oatis)