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U.S. natgas futures gain as market braces for Sept expiry


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U.S. natural gas futures edged higher ahead of the expiry of the front-month September

contract on Monday, with prices recovering from a more than one-week low hit earlier in the session on

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forecasts for hotter weather and higher cooling demand.

Gas futures for September delivery rose 5.7 cents, or 0.6%, to settle at $9.353 per million British

thermal units (mmBtu), having hit their lowest since Aug. 19, at $9.034 earlier in the session.

“The biggest factor in natgas this morning is the upcoming settlement of the September contract. September

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is ending its term as the front month, and after this afternoon it will cease trading… the front-month will

be extremely volatile today, as the volume of trading is far smaller than usual,” said John Abeln, an analyst

with data provider Refinitiv.

Abeln added, “As far as fundamental changes, weather and demand models have moved somewhat more bullish

over the weekend. But that effect might be dwarfed by last-minute trading.”

Gas was trading around $88 per mmBtu in Europe and $69 in Asia.

Meanwhile, Dutch wholesale gas prices eased after hitting their highest since March last week as demand

softened and traders booked profits in subdued activity with markets in Britain closed for a public holiday.

“Near-record European gas prices continue to support U.S. values both psychologically and fundamentally

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since LNG export activity will almost surely be maxed through the upcoming fall and winter periods,”

Ritterbusch and Associates said in a note.

But some analysts have cautioned that the lift from global gas prices may be capped by limited capacity in

the United States for exports, and more recently an extension to an outage at the fire-hit Freeport LNG export

hub in Texas.

The Freeport outage was also seen limiting potential U.S. supply to Europe heading into winter. The region

was also gearing for a scheduled outage on the Nord Stream 1 pipeline for three days from Aug. 31 to Sep. 2

that could hit supplies, with market players concerned flows might not resume.

Week ended Week ended Year ago Five-year

Aug 26 Aug 19 Aug 26 average

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(Forecast) (Actual) Aug 26

U.S. weekly natgas storage change (bcf): +56 +60 +21 +46

U.S. total natgas in storage (bcf): 2,635 2,579 2,868 2,978

U.S. total storage versus 5-year average -11.5% -12.0%

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

Last Year Average Average

2021 (2017-2021)

Henry Hub 9.67 9.37 4.03 3.73 2.89

Title Transfer Facility (TTF) 87.63 86.32 15.43 16.04 7.49

Japan Korea Marker (JKM) 68.8 69.96 16.36 18.00 8.95

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 5 5 4 12 15

U.S. GFS CDDs 198 133 163 162 150

U.S. GFS TDDs 203 138 167 174 165

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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 97.0 97.7 98.2 91.0 86.5

U.S. Imports from Canada 7.7 7.6 7.3 8.0 8.0

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 104.7 105.2 105.5 99.0 94.6

U.S. Demand (bcfd)

U.S. Exports to Canada 2.4 2.2 2.3 2.4 2.5

U.S. Exports to Mexico 5.6 5.6 5.6 6.3 5.4

U.S. LNG Exports 11.1 10.6 10.2 10.5 4.4

U.S. Commercial 4.5 4.5 4.5 4.6 4.5

U.S. Residential 3.6 3.6 3.6 3.7 3.4

U.S. Power Plant 41.4 42.7 41.8 36.8 38.8

U.S. Industrial 21.3 21.4 21.4 21.0 21.2

U.S. Plant Fuel 4.8 4.8 4.8 4.8 4.8

U.S. Pipe Distribution 2.1 2.1 2.1 2.1 2.1

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

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Total U.S. Consumption 77.7 79.3 78.4 73.0 74.9

Total U.S. Demand 96.8 97.8 96.5 92.3 87.2

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

Week ended Week ended Week ended Week ended Week ended

Sept 2 Aug 26 Aug 19 Aug 12 Aug 5

Wind 10 5 6 6 8

Solar 4 3 3 3 3

Hydro 5 6 6 5 5

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 40 44 42 45 42

Coal 21 22 22 22 21

Nuclear 18 18 19 17 17

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

Hub Current Day Prior Day

Henry Hub 9.48 9.47

Transco Z6 New York 8.83 8.67

PG&E Citygate 10.07 10.19

Dominion South 8.55 8.39

Chicago Citygate 8.71 8.68

Algonquin Citygate 8.85 8.82

SoCal Citygate 8.98 9.83

Waha Hub 7.75 8.25

AECO 3.72 2.71

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

Hub Current Day Prior Day

New England 87.00 105.75

PJM West 107.75 121.00

Ercot North 97.40 117.00

Mid C 123.20 64.78

Palo Verde 72.00 89.00

SP-15 73.50 85.13

(Reporting by Kavya Guduru in Bengaluru; Editing by Andrea Ricci and Cynthia Osterman)

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