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U.S. natgas futures up 1% on warmer forecasts for mid/late September


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U.S. natural gas futures edged up 1% on Friday on forecasts for warmer weather and

higher gas demand in mid- to late September.

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In the West, a tropical storm approaching Southern California threatened to bring high winds that could

whip up wildfires and heavy rainfall that could trigger flash floods, but the system will likely bring relief

from a brutal, 10-day heat wave.

The increase in gas futures came despite the ongoing outage at the Freeport liquefied natural gas (LNG)

export plant in Texas, which has left more gas in the United States for utilities to inject into stockpiles

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for next winter.

Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 billion cubic feet per day

(bcfd) of gas before it shut on June 8. Freeport LNG expects the facility to return to at least partial

service in early to mid-November.

Front-month gas futures rose 8.1 cents, or 1.0%, to settle at $7.996 per million British thermal

units (mmBtu).

That put the contract down about 9% for the week after sliding about 5% last week. It was the contract’s

biggest weekly loss since late June and the first time it fell for three weeks in a row since early July.

So far this year, gas futures were up about 115% as higher prices in Europe and Asia keep demand for U.S.

LNG exports strong. Global gas prices have soared due to supply disruptions and sanctions linked to Russia’s

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Feb. 24 invasion of Ukraine.

Gas was trading around $60 per mmBtu in Europe and $54 in Asia.

Russian gas exports via the three main lines into Germany – Nord Stream 1 (Russia-Germany), Yamal

(Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route – averaged just

1.4 bcfd so far in September, down from 2.5 bcfd in August and 10.8 bcfd in September 2021.

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U.S. gas futures lag far behind global prices because the United States is the world’s top producer with

all the fuel it needs for domestic use, while capacity constraints and the Freeport outage prevents the

country from exporting more LNG.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.1 bcfd so far in

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September from a record 98.0 bcfd in August.

Refinitiv projected average U.S. gas demand, including exports, would drop from 97.4 bcfd this week to

92.9 bcfd next week as the weather cools before rising to 93.3 bcfd in two weeks as the weather warms again.

The forecast for next week was lower than Refinitiv’s outlook on Thursday.

The average amount of gas flowing to U.S. LNG export plants rose to 11.1 bcfd so far in September from

11.0 bcfd in August. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export

plants can turn about 13.8 bcfd of gas into LNG.

The reduction in exports from Freeport is a problem for Europe, where most U.S. LNG has gone this year as

countries there wean themselves off Russian energy.

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Gas stockpiles in northwest Europe – Belgium, France, Germany and the Netherlands – were

currently about 4% above their five-year (2017-2021) average for this time of year, according to Refinitiv.

Storage was currently around 84% of capacity.

That is much healthier than U.S. gas inventories, which were still about 12% below their five-year norm.

Week ended Week ended Year ago Five-year

Sep 9 Sep 2 Sep 9 average

(Forecast) (Actual) Sep 9

U.S. weekly natgas storage change (bcf): +64 +54 +78 +82

U.S. total natgas in storage (bcf): 2,758 2,694 2,994 3,125

U.S. total storage versus 5-year average -11.7% -11.5%

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

Last Year Average Average

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2021 (2017-2021)

Henry Hub 8.11 7.92 5.11 3.73 2.89

Title Transfer Facility (TTF) 62.32 64.44 22.61 16.04 7.49

Japan Korea Marker (JKM) 52.84 54.20 23.35 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 10 10 6 20 32

U.S. GFS CDDs 149 153 151 144 119

U.S. GFS TDDs 159 163 157 164 151

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 98.4 99.3 99.1 91.9 87.0

U.S. Imports from Canada 7.7 7.8 7.9 8.1 7.7

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 106.1 107.1 107.0 100.0 95.8

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U.S. Demand (bcfd)

U.S. Exports to Canada 2.1 2.1 2.2 2.6 2.4

U.S. Exports to Mexico 5.6 5.4 5.6 5.9 5.3

U.S. LNG Exports 10.8 11.3 10.7 11.0 4.9

U.S. Commercial 4.5 4.5 4.7 4.6 4.9

U.S. Residential 3.6 3.6 3.7 3.7 3.9

U.S. Power Plant 42.0 41.9 37.7 33.9 33.2

U.S. Industrial 21.3 21.4 21.3 20.8 21.2

U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9

U.S. Pipe Distribution 2.1 2.1 2.0 2.1 2.1

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

Total U.S. Consumption 79.5 78.5 74.4 70.1 70.3

Total U.S. Demand 98.1 97.4 92.9 89.6 82.9

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

Week ended Week ended Week ended Week ended Week ended

Sep 9 Sep 2 Aug 26 Aug 19 Aug 12

Wind 5 7 5 6 6

Solar 3 3 3 3 3

Hydro 6 5 6 6 5

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 45 44 44 42 45

Coal 21 21 22 22 22

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Nuclear 18 17 18 19 17

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

Hub Current Day Prior Day

Henry Hub 8.27 8.12

Transco Z6 New York 7.38 7.59

PG&E Citygate 9.29 9.12

Dominion South 7.13 7.29

Chicago Citygate 7.53 7.61

Algonquin Citygate 7.45 7.65

SoCal Citygate 12.25 13.04

Waha Hub 6.95 7.45

AECO 3.78 3.27

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

Hub Current Day Prior Day

New England 75.25 75.00

PJM West 103.25 101.00

Ercot North 85.50 103.00

Mid C 105.00 300.00

Palo Verde 164.05 375.50

SP-15 169.75 375.50

(Reporting by Scott DiSavino

Editing by Nick Zieminski and Jonathan Oatis)

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