U.S. natgas jumps nearly 9% to 3-week high on colder weather outlook

U.S. natural gas futures jumped almost 9% on Monday to a three-week high on forecasts

for colder weather and higher heating demand over the next two weeks.

Front-month gas futures rose 32.9 cents, or 8.8%, to settle at $4.060 per million British thermal

units (mmBtu), their highest close since Dec. 3. The contract fell more than 6% on Thursday.

“Reversal from last week’s profit taking is being driven by colder weather model runs,” Robert DiDona of

Energy Ventures Analysis said.

“Overall, the discussion will focus on the short-term weather forecast. Futures will be highly dependent

on this cold weather pattern setting up for H1 January. If we get the cold air pushing into the L48, prices

have a chance to rise. If not, we will see selling.”

Data provider Refinitiv estimated 420 heating degree days (HDDs) over the next two weeks in the Lower 48

U.S. states, up from the 402 HDDs estimated on Friday. The normal is 437 HDDs for this time of year.

HDDs, used to estimate demand to heat homes and businesses, measure the number of degrees a day’s average

temperature is below 65 Fahrenheit (18 Celsius).

Refinitiv projected average U.S. gas demand, including exports, would jump from 110.0 billion cubic feet

per day (bcfd) this week to 126.7 bcfd next week as the weather turns seasonally colder.

In recent months, global gas prices hit record highs as utilities around the world scrambled for LNG

cargoes to replenish low stockpiles in Europe and meet insatiable demand in Asia, where energy shortfalls have

caused power blackouts in China.

The amount of gas flowing to U.S. LNG export plants has averaged 11.9 bcfd so far in December, now the

sixth train at Cheniere Energy Inc’s Sabine Pass plant in Louisiana is producing LNG. That compares

with 11.4 bcfd in November and a monthly record of 11.5 bcfd in April.

Output in the U.S. Lower 48 has averaged 97.0 billion cubic feet per day (bcfd) so far in December, which

would top the monthly record of 96.5 bcfd in November.

Week ended Week ended Year ago Five-year

Dec Dec 17 Dec 24 average

24(Forecast) (Actual) Dec 24

U.S. weekly natgas storage change (bcf): -116 -55 -120 -121

U.S. total natgas in storage (bcf): 3,246 3,362 3,476 3,207

U.S. total storage versus 5-year average +1.2% +1%

Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year

Last Year Average Average

2020 (2016-2020)

Henry Hub 4.06 3.73 2.58 2.13 2.66

Title Transfer Facility (TTF) — 46.99 5.82 3.24 5.19

Japan Korea Marker (JKM) — 38.84 9.46 4.22 6.49

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 420 402 414 440 437

U.S. GFS CDDs 11 11 2 4 3

U.S. GFS TDDs 431 413 416 444 440

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 97.3 98.1 98.2 84.7

U.S. Imports from Canada 8.4 7.7 8.5 8.9

U.S. LNG Imports 0.0 0.0 0.0 0.3

Total U.S. Supply 105.7 105.9 106.8 93.9

U.S. Demand (bcfd)

U.S. Exports to Canada 3.5 3.4 3.4 3.0

U.S. Exports to Mexico 5.6 5.0 5.5 4.6

U.S. LNG Exports 12.7 12.6 12.5 5.0

U.S. Commercial 15.6 13.3 17.2 15.0

U.S. Residential 25.8 21.6 29.3 25.4

U.S. Power Plant 29.5 23.7 26.3 25.8

U.S. Industrial 24.6 23.1 24.8 24.6

U.S. Plant Fuel 4.8 4.8 4.9 4.8

U.S. Pipe Distribution 2.7 2.4 2.8 2.4

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1

Total U.S. Consumption 103.2 89.0 105.4 98.1

Total U.S. Demand 124.9 110.0 126.7 110.7

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

Week ended Week ended Week ended Week ended Week ended

Dec 31 Dec 24 Dec 17 Dec 10 Dec 3

Wind 12 12 15 13 11

Solar 2 2 2 2 2

Hydro 7 7 7 7 6

Other 2 2 2 2 2

Petroleum 1 1 1 1 1

Natural Gas 35 36 34 36 37

Coal 19 19 18 19 19

Nuclear 22 22 22 21 22

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

Hub Current Day Prior Day

Henry Hub 3.56 3.95

Transco Z6 New York 2.60 3.75

PG&E Citygate 6.77 7.78

Dominion South 2.45 3.50

Chicago Citygate 3.29 3.70

Algonquin Citygate 6.00 16.50

SoCal Citygate 7.35 8.55

Waha Hub 2.70 3.35

AECO 4.23 4.32

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

Hub Current Day

New England 74.00 121.75

PJM West 19.00 34.00

Ercot North 22.50 29.50

Mid C 134.00 69.25

Palo Verde 83.00 73.75

SP-15 89.00 75.50

(Reporting by Brijesh Patel in Bengaluru; editing by Barbara Lewis and David Gregorio)