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UPDATE 1-U.S. natgas futures tumble to lowest since 1998 on oil price collapse

collapse@ (Adds latest prices, supply and demand data) March 9 (Reuters) - U.S. natural gas futures dropped to their lowest level in over 21 years on Monday after oil prices lost as much as a third of their value. U.S. oil futures fell by as much as 34% in their biggest daily rout since the 1991 Gulf War after Saudi Arabia signaled it would hike output to win market share even though the coronavirus has already left the market oversupplied. Even before crude futures collapsed, gas prices had already tumbled to within a nickel of their lowest level since August 1998 over the past week as record production and mild weather enabled utilities to leave more gas in storage this winter, making fuel shortages and prices spikes unlikely. Front-month gas futures for April delivery on the New York Mercantile Exchange fell 5.7 cents, or 3.3%, to $1.651 per million British thermal units (mmBtu) at 8:55 a.m. EDT (1255 GMT). Earlier in the session, gas slid to $1.61 per mmBtu, its lowest since August 1998. If prices drop below that level, they would fall to their lowest since September 1995. Traders noted gas prices fell despite forecasts for colder weather and higher heating demand next week than previously expected. Refinitiv, a data provider, projected average demand in the U.S. Lower 48 states, including exports, would rise from 100.7 billion cubic feet per day (bcfd) this week to 107.5 bcfd next week. That compares with Refinitiv's forecast on Friday of 104.4 bcfd this week and 99.6 bcfd next week. The amount of gas flowing to U.S. LNG export plants, meanwhile, was on track to edge up to 7.7 bcfd on Monday from 7.5 bcfd on Sunday, according to preliminary data from Refinitiv. That compares with an average of 7.8 bcfd last week and an all-time high of 9.5 bcfd on Jan. 31. Traders noted LNG feedgas was down from the record high due mostly to a reduction in flows after fog last week kept ships from docking at Cheniere Energy Inc's Sabine Pass facility in Louisiana. Traders are watching gas flows to U.S. LNG export plants for declines after customers canceled a couple of cargoes for April as low prices in Europe and Asia made it uneconomical for some European customers to lift cargoes. Global LNG prices are low due to warm winters in Europe and Asia and record-high storage in Europe compounded by lower demand in China related to the coronavirus.

With demand from U.S. power generators and industrial firms expected to decline or steady in coming years, producers are counting on LNG exports to maintain their spectacular growth to absorb record amounts of gas associated with oil production from shale formations. U.S. LNG exports jumped 53% in 2018 and 68% in 2019, and are expected to rise 33% in 2020, according to federal energy projections.

Week ended Week ended Year ago Five-yearMarch 6 Feb. 28 March 6 average(Forecast) (Actual) March 6U.S. natgas storage (bcf): -63 -109 -164

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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 257 231 293 280 291U.S. GFS CDDs 14 16 10 14 10U.S. GFS TDDs 271 247 370 294 301

Refinitiv U.S. Weekly GFS Supply and Demand Forecasts

Prior Week Current Week Next Week This Week Five-YearLast Year Average For

Month U.S. Supply (bcfd)

U.S. Lower 48 Dry Production 93.9 93.7 93.7 88.5 76.9U.S. Imports from Canada 7.1 6.8 7.3 8.6 8.5U.S. LNG Imports 0.1 0.1 0.0 0.1 0.2Total U.S. Supply 101.2 100.5 101.0 97.2 85.6

U.S. Demand (bcfd)

U.S. Exports to Canada 2.8 3.0 2.9 3.1 2.6U.S. Exports to Mexico 5.6 5.5 5.6 4.8 3.8U.S. LNG Exports 8.1 7.7 8.2 5.1 1.8U.S. Commercial 13.2 10.8 12.6 13.4 12.3U.S. Residential 20.5 16.1 19.4 21.7 19.4U.S. Power Plant 28.7 27.5 27.8 25.1 23.7U.S. Industrial 23.8 23.0 23.8 23.4 22.6U.S. Plant Fuel 4.6 4.6 4.6 4.6 4.7U.S. Pipe Distribution 2.5 2.2 2.4 2.3 2.5U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1Total U.S. Consumption 93.4 84.5 90.9 90.6 85.3Total U.S. Demand 109.9 100.7 107.5 103.6 93.5

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

Hub Current Day Prior DayHenry Hub <NG-W-HH-SNL> 1.76 1.89Transco Z6 New York <NG-CG-NY-SNL> 1.54 1.67PG&E Citygate <NG-CG-PGE-SNL> 2.64 2.64Dominion South <NG-PCN-APP-SNL> 1.52 1.56Chicago Citygate <NG-CG-CH-SNL> 1.52 1.64Algonquin Citygate <NG-CG-BS-SNL> 1.62 1.75SoCal Citygate <NG-SCL-CGT-SNL> 1.90 2.10Waha Hub <NG-WAH-WTX-SNL> 0.25 0.34

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

Hub Current Day Prior DayNew England <EL-PK-NPMS-SNL> 19.25 21.00PJM West <EL-PK-PJMW-SNL> 19.50 20.25Ercot North <EL-PK-ERTN-SNL> 15.25 17.50Mid C <EL-PK-MIDC-SNL> 28.75 24.38Palo Verde <EL-PK-PLVD-SNL> 27.75 25.00SP-15 <EL-PK-SP15-SNL> 29.50 28.50

(Reporting by Scott DiSavino; Editing by Steve Orlofsky and Nick Zieminski)

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