US natgas holds near 9-week high on low wind power, Canada wildfires

U.S. natural gas futures held near a nine-week high on Friday after a technical bounce in the prior

session and as a lack of wind power this week caused generators to burn more gas to produce electricity.

Traders also said prices were supported this week by a drop in gas exports from Canada due to wildfires in Alberta and other

western provinces.

The amount of U.S. power generated by wind this week was on track to drop to just 7% of the total versus a recent high of 17%

during the week ended April 21, according to federal energy data.

That means power generators had to burn more gas to produce electricity, and there will be less of the fuel available to go

into storage.

The amount of power generated by gas was on track to hit 43% this week, up from a recent low of just 37% during the windy week

ended April 21.

Front-month gas futures for June delivery on the New York Mercantile Exchange fell 0.7 cents, or 0.3%, to settle at

$2.585 per million British thermal units (mmBtu). On Thursday, the contract jumped about 10% to settle at its highest since March

13.

In intraday trade on Friday, the front-month rose over its 100-day moving average for the first time since late November,

but failed to remain above that level at the close. The contract has not closed above the 100-day moving average, a key level of

technical resistance, since September 2022.

The front-month also remained in technically overbought territory with a relative strength index (RSI) of more than 70 for

a second day in a row for the first time since July 2022.

For the week, the contract gained about 14% this week after rising about 6% last week. That was its biggest weekly percentage

increase since early March when it soared about 23%.

But all gas prices were not up. In the spot market, mild weather and ample hydropower in the U.S. West pressured next-day

gas for Friday at the PG&E Citygate in Northern California to $3.62 per mmBtu, its lowest since April 2021.

Over the past couple of weeks the average amount of gas flowing from Canada to the U.S. averaged just 7.1 billion cubic feet

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per day (bcfd) as wildfires in Alberta and other western provinces caused some producers to shut oil and gas output, according to

data provider Refinitiv.

That is well below the 8.4-bcfd average amount of gas exported from Canada to the U.S. since the start of the year and 2022’s

average of 9.0 bcfd. About 8% of the gas consumed in or exported from the U.S. comes from Canada.

On a daily basis, Canadian gas exports were on track to reach 7.3 bcfd on Friday, up from a 25-month low of 6.4 bcfd on

Wednesday.

In the U.S., meanwhile, Refinitiv said average gas output in the Lower 48 states held at 101.4 bcfd so far in May, matching

April’s monthly record.

Meteorologists projected the weather in the U.S. Lower 48 states would remain mostly near normal through June 3.

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Refinitiv forecast U.S. gas demand, including exports, would slide from 93.0 bcfd this week to 89.4 bcfd next week before

rising to 90.7 bcfd in two weeks. The forecasts for this week and next were similar to Refinitiv’s outlook on Thursday.

Gas flows to the seven big U.S. LNG export plants fell from a record 14.0 bcfd in April to an average of 12.9 bcfd so far in

May due to maintenance work at several plants, including Cameron LNG in Louisiana and Cheniere Energy Inc’s Sabine Pass in

Louisiana.

Week ended Week ended Year ago Five-year

May 19 May 12 May 19 average

(Forecast) (Actual) May 19

U.S. weekly natgas storage change (bcf): 106 99 88 96

U.S. total natgas in storage (bcf): 2,346 2,240 1,807 1,996

U.S. total storage versus 5-year average 17.5% 17.9%

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

Day Last Year Average Average

2022 (2018-2022)

Henry Hub 2.57 2.59 8.16 6.54 3.60

Title Transfer Facility (TTF) 9.55 9.47 28.96 40.50 14.39

Japan Korea Marker (JKM) 9.72 9.95 22.70 34.11 14.31

Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days

Two-Week Total Forecast Current Prior Day Prior Year 10-Year 30-Year

Day Norm Norm

U.S. GFS HDDs 28 23 37 44 46

U.S. GFS CDDs 99 106 114 102 100

U.S. GFS TDDs 127 129 151 146 146

Refinitiv U.S. Weekly GFS Supply and Demand Forecasts

Prior Week Current Next Week This Week Five-Year

Week Last Year Average For

Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production 101.3 101.4 101.3 97.0 89.1

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U.S. Imports from Canada 6.3 6.0 6.6 8.2 7.7

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 107.6 107.4 107.9 105.2 96.9

U.S. Demand (bcfd)

U.S. Exports to Canada 1.8 2.0 2.1 2.8 2.3

U.S. Exports to Mexico 5.6 5.4 5.5 6.1 5.2

U.S. LNG Exports 13.0 12.7 12.7 12.4 7.0

U.S. Commercial 5.4 5.1 4.8 5.0 5.7

U.S. Residential 5.8 4.9 4.5 4.7 6.7

U.S. Power Plant 31.0 34.4 31.6 30.6 27.5

U.S. Industrial 21.4 21.3 21.3 20.8 21.3

U.S. Plant Fuel 5.0 5.0 5.0 5.0 5.0

U.S. Pipe Distribution 1.9 1.9 1.8 1.9 2.1

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

Total U.S. Consumption 70.6 72.9 69.2 68.1 68.4

Total U.S. Demand 91.0 93.0 89.4 89.4 82.9

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

Week ended Week ended Week ended Week ended Week ended

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May 12 May 5 May 5 Apr 28 Apr 21

Wind 7 12 13 12 17

Solar 4 5 5 4 5

Hydro 9 9 8 7 7

Other 2 2 2 3 3

Petroleum 0 0 0 0 0

Natural Gas 43 40 39 39 37

Coal 15 14 13 16 14

Nuclear 19 19 19 19 18

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

Hub Current Prior Day

Day

Henry Hub 2.30 2.25

Transco Z6 New York 1.41 1.52

PG&E Citygate 3.62 4.10

Eastern Gas (old Dominion South) 1.34 1.38

Chicago Citygate 2.06 2.13

Algonquin Citygate 1.43 1.67

SoCal Citygate 2.11 2.60

Waha Hub 1.47 1.44

AECO 1.79 1.90

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

Hub Current Prior Day

Day

New England 26.00 27.00

PJM West 31.25 33.50

Ercot North 36.33 28.75

Mid C 19.50 22.00

Palo Verde 17.50 19.50

SP-15 18.00 22.75

(Reporting by Scott DiSavino; Editing by Jan Harvey and Marguerita Choy)