US natural gas prices rise on hot weather forecasts, contract expiry

Reuters
30 Jul
UPDATE 1-US natural gas prices rise on hot weather forecasts, contract expiry

Updates with closer price

July 29 (Reuters) - U.S. natural gas futures rose on Tuesday as hot weather forecasts in August are expected to boost air-conditioning demand, prompting more gas use by power generators, while technical buying ahead of the August contract expiration added further support.

Front-month gas futures for August delivery NGc1 on the New York Mercantile Exchange rose 9.07 cents, or 3.1%, to settle at $3.081 per million British thermal units at 03:05 p.m. EDT. The contract hit its lowest level since late April in the previous session. The August contract expires on Tuesday.

"We are seeing some profit-taking by short sellers this morning after several sessions of downward pressure pushed the market into an oversold stance. There is also some support for cash prices as August ends its run at the top of the board from immediate-term weather which has power sector demands elevated," said Gary Cunningham, director of market research at Tradition Energy.

"Some heat starting to creep onto the 11-15 day outlooks could give the bulls a reason to come out of hiding, but it needs to intensify before it is worthy of a true rally in prices."

Financial firm LSEG forecast average gas demand in the Lower 48, including exports, jumping from 106 bcfd last week to 112 bcfd this week. It also estimated 239 cooling degree days over the next two weeks, up from 232 estimated on Monday. CDDs, used to estimate demand to cool homes and businesses, measure the number of degrees a day's average temperature is above 65 degrees Fahrenheit (18.3 degrees Celsius).

"A hot summer is likely for North America. Warmth during June-August could be widespread in nature except over the Northeast U.S., with the most intense heat risks focused on the central U.S.," said Isaac Hankes, research specialist at LSEG Data and Analytics.

LSEG said average gas output in the Lower 48 has risen to 107.5 billion cubic feet per day so far in July, up from a monthly record high of 106.4 bcfd in June.

Meanwhile, oil and gas equipment supplier Baker Hughes BKR.O said on Tuesday it would acquire Chart Industries GTLS.N in a $13.6 billion all-cash deal, including debt, edging out rival suitor Flowserve FLS.N.

Elsewhere, Dutch and British wholesale gas prices rose slightly on Tuesday morning, trading in a narrow range, on strong supply and remarks from U.S. President Trump suggesting a shortened deadline for Russia to agree to a ceasefire in Ukraine. NG/EU

Week ended Jul 25 Forecast

Week ended Jul 18 Actual

Year ago Jul 25

Five-year average

Jul 25

U.S. weekly natgas storage change (bcf):

+42

+23

+18

+24

U.S. total natgas in storage (bcf):

3,117

3,075

3,246

2,928

U.S. total storage versus 5-year average

+6.5%

+5.9%

Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2024

Five-Year Average (2019-2023)

Henry Hub NGc1

3.06

3.10

2.21

2.41

3.52

Title Transfer Facility (TTF) TRNLTTFMc1

10.91

11.11

10.32

10.95

15.47

Japan Korea Marker (JKM) JKMc1

-

11.93

12.32

11.89

15.23

LSEG Heating $(HDD.UK)$, Cooling $(CDD.AU)$ and Total (TDD) Degree Days

Two-Week Total Forecast

Current Day

Prior Day

Prior Year

10-Year Norm

30-Year Norm

U.S. GFS HDDs

2

2

5

2

3

U.S. GFS CDDs

239

232

205

181

173

U.S. GFS TDDs

241

234

210

183

176

LSEG U.S. Weekly GFS Supply and Demand Forecasts

Prior Week

Current Week

Next Week

This Week Last Year

Five-Year (2020-2024)Average For Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production

108

108

108

97.8

U.S. Imports from Canada

8.1

8

8

7.8

U.S. LNG Imports

0.0

0

0

0.1

Total U.S. Supply

116.1

116

116

105.7

U.S. Demand (bcfd)

U.S. Exports to Canada

2.1

2

2

2.3

U.S. Exports to Mexico

6.8

7

7

6.4

U.S. LNG Export Feedgas

15.2

15

16

10.0

U.S. Commercial

4.4

4

4

4.7

U.S. Residential

3.6

4

4

3.5

U.S. Power Plant

43.9

50

46

48.1

U.S. Industrial

22.3

22

22

21.7

U.S. Plant Fuel

5.3

5

5

5.4

U.S. Pipe Distribution

2.2

2

2

3.3

U.S. Vehicle Fuel

0.1

0

0

0.2

Total U.S. Consumption

81.8

89

83

86.9

Total U.S. Demand

105.9

112

108

99.2

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)

2025 Current Day

% of Normal Forecast

2025

Prior Day % of Normal Forecast

2024

% of Normal Actual

2023

% of Normal Actual

2022

% of Normal Actual

Apr-Sep

77

77

74

83

107

Jan-Jul

78

78

76

77

102

Oct-Sep

80

80

77

76

103

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

Week ended Aug 1

Week ended Jul 25

2024

2023

2022

Wind

9

10

11

10

11

Solar

7

7

5

4

3

Hydro

4

5

6

6

6

Other

1

1

1

2

2

Petroleum

0

0

0

0

0

Natural Gas

43

41

42

41

38

Coal

19

19

16

17

21

Nuclear

17

17

19

19

19

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

Hub

Current Day

Prior Day

Henry Hub NG-W-HH-SNL

3.11

3.10

Transco Z6 New York NG-CG-NY-SNL

2.89

2.80

PG&E Citygate NG-CG-PGE-SNL

3.24

3.16

Eastern Gas (old Dominion South) NG-PCN-APP-SNL

2.56

2.49

Chicago Citygate NG-CG-CH-SNL

2.95

2.83

Algonquin Citygate NG-CG-BS-SNL

6.25

3.34

SoCal Citygate NG-SCL-CGT-SNL

3.44

3.29

Waha Hub NG-WAH-WTX-SNL

1.26

1.11

AECO NG-ASH-ALB-SNL

0.22

0.40

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

Hub

Current Day

Prior Day

New England E-NEPLMHP-IDX

171.03

171.03

PJM West E-PJWHDAP-IDX

203.11

144.01

Mid C W-MIDCP-IDX

74.64

57.66

Palo Verde W-PVP-IDX

52.38

49.50

SP-15 W-SP15-IDX

36.25

32.96

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Paul Simao and Andrea Ricci)

((Ashitha.Shivaprasad@thomsonreuters.com;))

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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