U.S. natural gas fall 4% as LNG exports drop on record low global prices

U.S. natural gas fall 4% as LNG exports drop on record low global prices thumbnail

June 1 (Reuters) – U.S. natural gas futures fell over 4% on Monday as liquefied natural gas (LNG)
exports continue to drop on record low gas prices in Europe and Asia.
That price decline came despite forecasts for warmer weather and higher air conditioning demand over
the next two weeks than previously expected.
Front-month gas futures for July delivery fell 7.7 cents, or 4.2%, to $1.772 per million
British thermal units at 8:36 a.m. EDT (1236 GMT).
Data provider Refinitiv said gas output in the U.S. Lower 48 states was on track to fall to 87.6
billion cubic feet per day (bcfd) on the first day of June, down from a one-year low of 89.3 bcfd in May
and an all-time monthly high of 95.4 bcfd in November.
With warmer weather coming, Refinitiv projected demand, including exports, would rise from 80.2 bcfd
this week to 81.8 bcfd next week. That is much higher than Refinitiv’s forecasts on Friday of 78.5 bcfd
this week and 79.3 bcfd next week.
With U.S. gas prices expected to remain higher than European benchmarks through September
, the amount of pipeline gas flowing to U.S. LNG export plants was on track to
fall to a nine-month low of 4.3 bcfd on the first day of June as buyers cancel cargoes. That is down
from an 8-month low of 6.4 bcfd during May and a monthly record high of 8.7 bcfd in February.

Most of the daily decline in LNG exports is expected at Cheniere Energy Inc's exports plants

at Sabine Pass in Louisiana and Corpus Christi in Texas, according to early Refinitiv data.
Analysts at Energy Aspects said they expect around 125 U.S. cargoes to be shut-in this summer,
potentially slashing LNG deliveries to Europe by up to 424 billion cubic feet compared to what was
expected at the start of the summer.

                                   Week ended      Week ended    Year ago   Five-year   
                                      May 29        May 22        May 29     average    
                                    (Forecast)      (Actual)                  May 29    

U.S. natgas storage (bcf): +112 +109 +118 +103

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 12 18 17 22 23
U.S. GFS CDDs 162 140 127 140 126
U.S. GFS TDDs 174 158 144 162 149

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 88.3 88.6 88.5 89.9 77.5
U.S. Imports from Canada 6.1 6.1 6.3 8.0 7.9
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 94.3 94.7 94.8 97.9 85.5

U.S. Demand (bcfd)
U.S. Exports to Canada 2.1 2.2 2.2 2.2 1.9
U.S. Exports to Mexico 4.8 4.9 4.7 4.8 4.1
U.S. LNG Exports 6.0 5.1 4.5 5.2 1.9
U.S. Commercial 4.6 4.6 4.5 4.6 4.7
U.S. Residential 4.0 4.0 3.8 4.1 4.1
U.S. Power Plant 29.5 31.8 34.2 32.0 31.0
U.S. Industrial 21.2 21.3 21.4 21.4 20.4
U.S. Plant Fuel 4.4 4.4 4.4 4.4 4.5
U.S. Pipe Distribution 1.7 1.8 1.9 1.8 1.9
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 65.6 68.0 70.3 68.4 66.7
Total U.S. Demand 78.5 80.2 81.8 80.6 74.6

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 1.70 1.79
Transco Z6 New York NG-CG-NY-SNL 1.27 1.33
PG&E Citygate NG-CG-PGE-SNL 2.42 2.51
Dominion South NG-PCN-APP-SNL 1.25 1.36
Chicago Citygate NG-CG-CH-SNL 1.54 1.64
Algonquin Citygate NG-CG-BS-SNL 1.33 1.62
SoCal Citygate NG-SCL-CGT-SNL 1.81 2.19
Waha Hub NG-WAH-WTX-SNL 1.49 1.54

SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 19.25 21.25
PJM West EL-PK-PJMW-SNL 20.75 25.50
Ercot North EL-PK-ERTN-SNL 23.50 23.25
Mid C EL-PK-MIDC-SNL 9.18 19.00
Palo Verde EL-PK-PLVD-SNL 24.00 16.75
SP-15 EL-PK-SP15-SNL 15.50 24.00

(Reporting by Scott DiSavino
Editing by Chizu Nomiyama)

,
Reuters

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