US natgas prices jump 5% to 1-week high on forecasts for hotter weather, more cooling demand

By Scott DiSavino

June 16 (Reuters) - U.S. natural gas futures jumped about 5% on Monday to a one-week high, on raised forecasts for temperatures stoking demand for air conditioning over the next two weeks, which should have electricity generators buying more gas to produce power.

Gas futures for July delivery NGc1 on the New York Mercantile Exchange rose 16.7 cents, or 4.7%, to settle at $3.748 per million British thermal units (mmBtu), their highest close since June 6. Capping gains, analysts expect that energy firms set another storage record with an eighth triple-digit injection during the week ended June 13.

During the prior week ended June 6, energy firms added 100 billion cubic feet or more of gas into storage for a seventh week in a row, tying the seven-week triple-digit injection record set in June 2014, according to federal energy data going back to 2010.

So far this year, energy firms have pulled a monthly record high of 1.013 trillion cubic feet of gas out of storage in January when brutally cold weather boosted heating demand and added a monthly record high of 497 bcf into storage in May when mild weather kept both heating and cooling use low, according to federal energy data. The prior all-time monthly injection high was 494 bcf in May 2015.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states held at 105.2 billion cubic feet per day so far in June, the same as in May. That was down from the monthly record high of 106.3 bcfd in March due primarily to normal spring maintenance.

Meteorologists forecast weather across the Lower 48 states will remain mostly warmer than normal through at least July 1.

With hotter summer weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 99.8 bcfd this week to 102.7 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.

The average amount of gas flowing to the eight big U.S. LNG export plants fell to 14.1 bcfd so far in June, down from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.

Traders said LNG feedgas reductions since April were primarily due to normal spring maintenance, including work at Cameron LNG's 2.0-bcfd plant in Louisiana and Cheniere Energy's LNG.N 4.5-bcfd Sabine Pass facility in Louisiana and 3.9-bcfd Corpus Christi plant in Texas, and short, unplanned unit outages at Freeport LNG's 2.1-bcfd plant in Texas on May 6, May 23, May 28 and June 3.

Energy traders said they expect maintenance to continue through late-June at Sabine, which has been pulling about 3.0 bcfd of gas since the end of May. That figure compares with average feedgas of 4.5 bcfd during the month of May.

The U.S. became the world's biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.

Gas was trading around a 10-week high of $13 per mmBtu at the Dutch Title Transfer Facility TRNLTTFMc1 benchmark in Europe and a 12-week high of $13 at the Japan Korea Marker JKMc1 benchmark in Asia. NG/EU

For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.

For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminal

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For next-day SNL U.S. gas prices, see: 0#SNL-NG

For next-day SNL U.S. power prices, see: 0#SNL-PWR

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./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S. natural gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

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