July 2, 2020 / 7:01 PM / a month ago

UPDATE 2-U.S. natgas futures gain as cooling demand reduces injection

 (Updates prices)
    July 2 (Reuters) - U.S. natural gas futures rose on Thursday after a federal report showed a
smaller-than-expected storage build last week amid greater demand for cooling as the weather turned
hotter in the United States.
    The August gas futures contract was up 6.3 cents, or 3.7%, to settle at $1.734 per million
British thermal units.
    "Warmer-than-expected weather has increased cooling demand and that is being reflected in the report
with injection coming below expectations," said Thomas Saal, senior vice president of energy at INTL
FCStone.
    Weather forecasts pointed toward a hot summer, with Refinitiv data indicating 248 cooling degree
days (CDDs) in the Lower 48 states over the next two weeks. The normal for this time of year is 194
CDDs.
    The U.S. Energy Information Administration said U.S. utilities injected 65 billion cubic feet (bcf)
of natural gas into storage last week, lower than the 78 bcf forecast by a Reuters poll on Wednesday.

    The increase during the week ended June 26 has increased stockpiles to 3.077 trillion cubic feet
(tcf), which is still 17.8% higher than the five-year average and about 30.1% above the same week a year
ago.
    Prolonged lockdowns to curb the spread of the coronavirus have kept many businesses shut, cutting
U.S. LNG exports by half since the start of the year, with stockpiles filling fast and expected to reach
a record 4.1 trillion cubic feet by the end of October.
    "Futures are still below $2 because the LNG exports have dropped drastically due to the pandemic and
a recovering crude oil price have ramped up production," Saal added.
    Refinitiv said production in the Lower 48 U.S. states rose to 87.95 billion cubic feet per day
(bcfd) on Thursday from 87.90 bcf the previous day.
    Markets will be closed on Friday, a day ahead of the U.S. Fourth of July holiday, which falls on a
Saturday.
                                       Week ended      Week ended    Year ago   Five-year   
                                          June 26         June       June 26     average    
                                        (Forecast)     26(Actual)                June 26    
 U.S. natgas storage (bcf):                +78            +65          +92         +65      
                                                                                            
                                                                                            
 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                              2              2            3           4            4
 U.S. GFS CDDs                             248            248          221         203          194
 U.S. GFS TDDs                             250            250          224         207          198
                                                                                            
 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts                                      
                                        Prior Week    Current Week  Next Week                     
 U.S. Supply (bcfd)                                                                               
                                                                                            
 U.S. Lower 48 Dry Production              87.3           87.3         87.2                       
 U.S. Imports from Canada                  6.5            6.4          6.8                        
 U.S. LNG Imports                          0.0            0.0          0.0                        
 Total U.S. Supply                         93.7           93.7         94.0                       
 
 U.S. Demand (bcfd)
 U.S. Exports to Canada                    2.3            2.4          2.4                        
 U.S. Exports to Mexico                    5.5            5.5          5.4                        
 U.S. LNG Exports                          4.1            4.1          3.3                        
 U.S. Commercial                           4.4            4.3          4.3                        
 U.S. Residential                          3.5            3.5          3.5                        
 U.S. Power Plant                          37.3           39.0         43.0                       
 U.S. Industrial                           21.3           21.3         21.3                       
 U.S. Plant Fuel                           4.3            4.3          4.3                        
 U.S. Pipe Distribution                    1.9            2.0          2.1                        
 U.S. Vehicle Fuel                         0.1            0.1          0.1                        
 Total U.S. Consumption                    72.9           74.6         78.7                       
 Total U.S. Demand                         84.9           86.5         89.8                       
                                                                                            
                                                                                            
 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)                                         
 Hub                                   Current Day     Prior Day                            
 Henry Hub NG-W-HH-SNL                   1.69           1.76                              
 Transco Z6 New York NG-CG-NY-SNL        1.46           1.55                              
 PG&E Citygate NG-CG-PGE-SNL             2.15           2.20                              
 Dominion South NG-PCN-APP-SNL           1.33           1.46                              
 Chicago Citygate NG-CG-CH-SNL           1.55           1.66                              
 Algonquin Citygate NG-CG-BS-SNL         1.51           1.65                              
 SoCal Citygate NG-SCL-CGT-SNL           1.54           1.65                              
 Waha Hub NG-WAH-WTX-SNL                 1.21           1.39                              
                                                                                            
 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)                                       
 Hub                                   Current Day     Prior Day                            
 New England EL-PK-NPMS-SNL             23.75          21.00                              
 PJM West EL-PK-PJMW-SNL                29.28          23.75                              
 Ercot North EL-PK-ERTN-SNL             34.00          35.50                              
 Mid C EL-PK-MIDC-SNL                    2.05           2.05                              
 Palo Verde EL-PK-PLVD-SNL              22.25          22.25                              
 SP-15 EL-PK-SP15-SNL                   22.75          22.75                              
 
 (Reporting by Diptendu Lahiri in Bengaluru; editing by Jonathan Oatis)
  
 
 
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