U.S. natgas down 4% to 10-week low as Hurricane Ian approaches Florida


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U.S. natural gas futures fell about 4% on Tuesday to a 10-week low as Hurricane

Ian advanced toward Florida and on forecasts for milder weather over the next two weeks that will likely cut

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gas demand and allow utilities to inject more fuel into storage.

The U.S. National Hurricane Center (NHC) projected Ian, after battering Cuba, would cross the Gulf of

Mexico and slam southwest Florida on Wednesday as a major storm with winds of up to 125 miles (201 kilometers)

per hour.

Only about 2% of U.S. gas production comes from the federal offshore Gulf of Mexico, with most coming

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from shale basins like the Permian in West Texas and the Marcellus in Pennsylvania. Analysts said storms were

more likely to cut demand than supply since they knock out power and can cause liquefied natural , gas (LNG)

export terminals to shut.

There were still about 487,800 customers in Puerto Rico and 127,000 in Nova Scotia without power after

Hurricane Fiona battered the U.S. island on Sept. 18 and the Canadian province on Sept. 24.

Also weighing on gas prices, demand was expected to decline in October when the Cove Point LNG plant in

Maryland shuts for a couple weeks of maintenance. Cove Point consumes about 0.8 billion cubic feet per day

(bcfd) of gas.

U.S. gas use has already been reduced for months by the ongoing outage at the Freeport LNG export plant in

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Texas, leaving more gas for U.S. utilities to inject into stockpiles for next winter.

Freeport, the second-biggest U.S. LNG export plant, was consuming about 2 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.

On its second to last day as the front-month, gas futures for October delivery fell 25.2 cents, or

3.7%, to settle at $6.651 per million British thermal units (mmBtu), their lowest close since July 14.

The front-month remained technically oversold, with a relative strength index (RSI) below 30 for a fourth

straight day for the first time since early July.

Year-to-date, gas futures remained up about 79% as global gas prices have soared, feeding demand for U.S.

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exports due to supply disruptions and sanctions linked to Russia’s Feb. 24 invasion of Ukraine.

Gas was trading around $54 per mmBtu in Europe and $42 in Asia. That was an 11% gain

for prices in Europe due to leaks on the Nord Stream pipelines from Russia to Germany.

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 – have averaged

just 1.3 bcfd so far in September, down from 2.5 bcfd in August and 10.8 bcfd in September 2021.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states has risen to 98.8 bcfd so far

in September from a monthly record of 98.0 bcfd in August.

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With cooler autumn weather coming, Refinitiv projected average U.S. gas demand, including exports, would

slip from 90.3 bcfd this week to 88.3 bcfd next week. The forecast for next week was lower than Refinitiv’s

outlook on Monday.

Week ended Week ended Year ago Five-year

Sep 23 Sep 16 Sep 23 average

(Forecast) (Actual) Sep 23

U.S. weekly natgas storage change (bcf): +86 +103 +86 +77

U.S. total natgas in storage (bcf): 2,960 2,874 3,157 3,283

U.S. total storage versus 5-year average -9.8% -10.4%

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 6.97 6.90 5.11 3.73 2.89

Title Transfer Facility (TTF) 54.23 48.84 22.61 16.04 7.49

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Japan Korea Marker (JKM) 37.69 37.57 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 58 55 24 63 80

U.S. GFS CDDs 72 76 89 85 71

U.S. GFS TDDs 130 131 113 148 151

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 98.3 98.7 99.2 93.5 87.0

U.S. Imports from Canada 8.0 7.8 7.5 8.3 7.7

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 106.2 106.5 106.7 101.8 95.8

U.S. Demand (bcfd)

U.S. Exports to Canada 2.1 1.9 1.9 2.0 2.4

U.S. Exports to Mexico 5.5 5.6 5.5 5.7 5.3

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U.S. LNG Exports 11.5 11.7 11.3 10.3 4.9

U.S. Commercial 4.8 5.4 5.3 5.0 4.9

U.S. Residential 3.9 5.0 4.9 4.3 3.9

U.S. Power Plant 36.4 32.1 31.1 29.8 33.2

U.S. Industrial 21.3 21.7 21.4 20.7 21.2

U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9

U.S. Pipe Distribution 1.9 1.9 1.9 1.9 2.1

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1

Total U.S. Consumption 73.3 71.0 69.6 66.7 70.3

Total U.S. Demand 92.4 90.3 88.3 84.7 82.9

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

Week ended Week ended Week ended Week ended Week ended

Sep 30 Sep 23 Sep 16 Sep 9 Sep 2

Wind 10 10 8 6 7

Solar 4 3 3 3 3

Hydro 5 5 5 6 5

Other 2 2 2 2 2

Petroleum 0 0 0 0 0

Natural Gas 39 41 42 45 44

Coal 18 19 19 21 21

Nuclear 21 19 19 18 17

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

Hub Current Day Prior Day

Henry Hub 6.75 6.75

Transco Z6 New York 4.30 3.74

PG&E Citygate 7.69 7.30

Dominion South 4.16 3.76

Chicago Citygate 5.09 4.92

Algonquin Citygate 4.60 4.07

SoCal Citygate 8.90 5.75

Waha Hub 3.79 3.76

AECO 3.83 4.16

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

Hub Current Day Prior Day

New England 51.75 38.50

PJM West 57.50 45.75

Ercot North 49.90 52.25

Mid C 108.00 139.00

Palo Verde 101.25 58.75

SP-15 105.50 60.25

(Reporting by Scott DiSavino; Editing by Jan Harvey)

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