UPDATE 2-U.S. natgas futures edge up on small storage build, heat forecasts - Reuters News

21-Jul-2016 02:10:47 PM

Adds latest prices

July 21 (Reuters) - U.S. natural gas futures on Thursday edged higher on a slightly smaller-than-expected storage build and forecasts for continued hotter-than-normal weather over the next two weeks.

The U.S. Energy Information Administration said utilities added 34 billion cubic feet of gas into storage during the week ended July 15.
That was less than analysts' consensus estimate of 39 bcf in a Reuters poll and compared with builds of 64 bcf in the prior week, 70 bcf a year earlier and a five-year average of 61 bcf. EIA/GAS
After falling to a four-week low overnight, front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange rose 3.4 cents, or 1.3 percent, to settle at $2.692 per million British thermal units.
That overnight decline came despite forecasts U.S. power generators will burn record amounts of gas this week as consumers crank up air conditioners to cope with a heat wave blanketing a large part of the country. (Full Story)
That coming heat has already caused the PJM and MISO power grid operators in the U.S. Midwest and Mid-Atlantic to tell utility members to delay generation and transmission maintenance. (Full Story)
The stockpile of gas left in storage after the milder-than-normal winter of 2015-2016 has remained at seasonal highs since April and will likely top 2015's record high at the end of the injection season in early November, according to analysts. NGAS/POLL
That storage glut has helped keep a lid on next-day prices at the Henry Hub GT-HH-IDX benchmark in Louisiana, which have averaged just $2.12 so far this year. Futures for the balance of 2016 NGBALst were fetching $2.79. That compares with $2.61 in 2015, which was the lowest since 1999.
Those low prices have prompted power generators to burn record amounts of gas instead of coal, while producers reduce output and wait for prices to rise. Futures for calendar 2017 NGYstc1 were trading at $3.07.
The U.S. power sector has burned an average of 26.4 billion cubic feet per day so far in 2016, topping the record 24.8 bcfd of a year earlier, according to Thomson Reuters (TR) data.
So far this year, U.S. drillers have reduced average dry gas output in the lower 48 states to 73.0 bcfd from a record 73.5 bcfd in 2015. Production is expected to fall to 71.2 bcfd on Thursday, the lowest level since December, the TR data showed.

	Week ended July 15 (Actual)	Week ended July 8(Actual)	Year Ago	5-year Average
U.S. natgas storage (change in bcf):	34	64	70	61

Heating & Cooling Degree Days
Two-Week Total Forecast	Current Day	Prior Day	30-Year Norm
GFS HDDs	0	1	2
GFS CDDs	271	272	202

EC HDDs	1	2	2
EC CDDs	238	239	189

GFS Gas Consumption (bcfd)
Two-Week Average Forecast	Current Day	Prior Day	30-Year Norm
Residential	3.7	3.7	3.7
Commercial	4.4	4.4	4.4
Power	39.6	39.9	29.4
Industrial	20.0	20.0	20.6
Total	67.7	67.9	58.1

EC Gas Consumption (bcfd)
Two-Week Average Forecast	Current Day	Prior Day	30-Year Norm
Residential	3.6	3.7	3.7
Commercial	4.4	4.4	4.4
Power	38.3	38.4	29.4
Industrial	19.9	19.9	20.6
Total	66.2	66.4	58.0

Thomson Reuters Supply Chain & Commodities Research (SC&CR)Supply Estimates (bcfd):
	Current Day	Prior Day	Prior Year	High since 2011
U.S. Lower 48 dry production	71.2	71.8	74.6	75.2
Net U.S. imports from Canada	7.1	7.3	5.3	8.3
U.S. LNG imports	0.2	0.2	0.3	2.8
U.S. LNG exports	0.7	0.7		0.8
U.S. exports to Mexico	3.7	3.8	3.4	4.3
U.S. gas used due to nuclear outages	0.1	0.1


ICE U.S. Natural Gas Next-Day Prices ($ per mmBtu):
Hub	Current Day	Prior Day
Algonquin E-ALGCIT-IDX	2.84	2.74
Dominion South E-DOMSP-IDX	1.39	1.40
New York E-TSCO6NY-IDX	2.77	2.22
Henry Hub GT-HH-IDX	2.70	2.72
Chicago MC-CHICIT-IDX	2.73	2.71
SoCal Border W-SOBOR-IDX	2.91	2.82

ICE U.S. Power Next-Day Prices ($ per megawatt-hour):
Hub	Current Day	Prior Day
Ercot North SE-ERCONP-IDX	38.94	38.72
Mid C W-MIDCP-IDX	27.79	33.01
New England E-NEPLMHP-IDX	46.74	34.78
Palo Verde W-PVP-IDX	59.04	52.15
PJM West E-PJWHRTP-IX	57.36	44.28
SP-15 W-SP15-IDX	45.84	44.08

(Reporting by Scott DiSavino; Editing by Marguerita Choy and James Dalgleish)

(( scott.disavino@thomsonreuters.com ; +1 646 223-6072; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net ))

For Thomson Reuters Supply Chain & Commodities Research (SC&CR), formerly known as Thomson Reuters Analytics, see: Open
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For graphics on Baker Hughes rig counts, see:
http://graphics.thomsonreuters.com/15/rigcount/index.html
    
For next-day ICE U.S. gas prices, see: 0#GAS-IDX=ICE
    
For next-day ICE U.S. power prices, see: 0#POWER-IDX=ICE
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/ 
    
For U.S. Northwest hydro power report, see: NWRFC
    
For U.S. natural gas inventories vs five-year range, see: http://link.reuters.com/deh95w
For natural gas rig count vs futures price, see: http://link.reuters.com/nuz86t

Keywords: USA-NATGAS/NYMEX (UPDATE 2)

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