U.S. natural gas futures edged up about 1% to a three-week high on Friday as hot weather forces power generators to burn lots of the fuel to keep air conditioners humming and a slow but steady rise in gas flows to liquefied natural gas (LNG) export plants.
That price increase came despite ample amounts of gas in storage and record output. That record output should allow energy firms to keep injecting more gas into storage than usual in coming weeks. Stockpiles were currently around 6% above the five-year normal.
Front-month gas futures for August delivery on the New York Mercantile Exchange rose 2.3 cents, or 0.6%, to settle at $3.565 per million British thermal units, their highest close since June 27.
For the week, the front-month was up about 8% after dropping around 14% over the prior four weeks.
Meteorologists forecast the weather in the Lower 48 U.S. states would remain mostly hotter than normal through at least August 2, with the hottest days so far this summer expected next week.
Temperatures across the country will average around 81 degrees Fahrenheit (27.2 degrees Celsius) on July 25, on track to top this summer’s current hottest daily average of 80 F on June 24 but still below the daily average record high of 83 F on July 20, 2022, according to data from financial firm LSEG going back to 2018.
SUPPLY AND DEMAND
LSEG said average gas output in the Lower 48 rose to 107.1 billion cubic feet per day so far in July, up from a monthly record high of 106.4 bcfd in June.
On a daily basis, output hit a record high of 107.92 bcfd on July 14, topping the prior all-time daily high of 107.91 bcfd on April 18.
LSEG forecast average gas demand in the Lower 48, including exports, would slide from 110.1 bcfd this week to 107.4 bcfd next week before rising to 110.9 bcfd in two weeks. The forecasts for this week and next were similar to LSEG’s outlook on Thursday.
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.
U.S. energy firm Kinder Morgan said its 0.4-bcfd Elba Island LNG export plant in Georgia should return to service by the weekend after a couple of days of maintenance.
The U.S. became the world’s biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due in part to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.
Gas was trading around $12 per mmBtu at both the Dutch Title Transfer Facility benchmark in Europe and the Japan Korea Marker benchmark in Asia.
Week ended Week ended Year ago Five-year
Jul 18 Jul 11 Jul 18 average
Forecast Actual Jul 18 U.S. weekly natgas storage change (bcf): +39 +46 +20 +30 U.S. total natgas in storage (bcf): 3,091 3,052 3,228 2,904 U.S. total storage versus 5-year average +6.4% +6.2%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2024 (2019-2023) Henry Hub 3.56 3.54 2.21 2.41 3.52 Title Transfer Facility (TTF) 11.72 11.93 10.32 10.95 15.47 Japan Korea Marker (JKM) 12.18 12.41 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 30-Year
Norm Norm U.S. GFS HDDs 3 4 3 3 3 U.S. GFS CDDs 238 236 218 213 203 U.S. GFS TDDs 241 240 221 216 206
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2020-2024)
Average For
Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 106.5 107.5 107.4 103.3 97.8 U.S. Imports from Canada 8.2 8.5 8.0 N/A 7.8 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 114.7 116.0 115.3 N/A 105.7
U.S. Demand (bcfd) U.S. Exports to Canada 2.0 2.0 2.1 N/A 2.3 U.S. Exports to Mexico 7.0 7.0 6.8 N/A 6.4 U.S. LNG Export Feedgas 15.2 15.4 15.4 11.1 10.0 U.S. Commercial 4.3 4.4 4.4 4.4 4.7 U.S. Residential 3.6 3.6 3.6 3.6 3.5 U.S. Power Plant 45.2 47.8 45.2 49.0 48.1 U.S. Industrial 22.2 22.2 22.3 21.8 21.7 U.S. Plant Fuel 5.3 5.3 5.3 5.3 5.4 U.S. Pipe Distribution 2.2 2.3 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 85.6 83.1 86.4 86.9 Total U.S. Demand 107.1 110.1 107.4 N/A 99.2
N/A is Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam 2025 2025 2024 2023 2022 (Fiscal year ending Sep 30) Current Day Prior Day % of Normal % of Normal % of Normal
% of Normal % of Normal Actual Actual Actual
Forecast Forecast Apr-Sep 77 77 74 83 107 Jan-Jul 79 79 76 77 102 Oct-Sep 80 80 77 76 103
U.S. weekly power generation percent by fuel – EIA
Week ended Week ended 2024 2023 2022
Jul 18 Jul 11 Wind 7 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 44 44 42 41 38 Coal 19 19 16 17 21 Nuclear 16 17 19 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 3.52 3.42 Transco Z6 New York 3.05 3.13 PG&E Citygate 3.90 3.82 Eastern Gas (old Dominion South) 2.74 2.91 Chicago Citygate 3.26 3.29 Algonquin Citygate 4.25 9.75 SoCal Citygate 3.79 3.93 Waha Hub 1.88 1.91 AECO 0.17 0.40
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 62.93 165.64 PJM West 64.93 112.27 Mid C 36.03 54.77 Palo Verde 44.42 53.75 SP-15 29.48 39.31
(Reporting by Scott DiSavino Editing by Nick Zieminski and Marguerita Choy)