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US natural gas futures gained around 3% on Tuesday on concerns that Russia may cut off gas
flows to Poland and expectations that recent declines in production due to cold weather in North Dakota and the
The Rockies will reduce the amount of gas utilities can pump into storage in the coming weeks.
Russian energy giant Gazprom PAO told Poland’s Polskie Górnictwo Naftowe i Gazownictwo SA
(PGNiG) will stop gas supply along the Yamal pipeline from Wednesday morning.
Traders also noted that technical factors likely also played a role in Tuesday’s trade with the upcoming
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May options expiration.
“Trader positioning towards May options expiry likely to dominate trading today,” analysts
at energy consulting group EBW Analytics said, noting that “Over the past year, the previous month’s contract has
increased in eight out of twelve months…on the expiration day of the options,”
In its penultimate day as a US advance month, gas futures for May delivery at the New York
The Mercantile Exchange (NYMEX) rose 18.1 cents, or 2.7%, to close at $6.850 per million British thermal units.
(mmBtu). NYMEX gas options expire the day prior to expiration of the futures contract.
Futures for June, soon to be the previous month, gained around 2.5% to $6.98 per mmBtu.
US gas futures are up about 82% year-to-date as higher global prices have kept US demand low.
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liquefied natural gas (LNG) exports near record levels since Russia invaded Ukraine on February 24.
about $31 per mmBtu in Europe and $25 in Asia.
However, the US gas market remains largely insulated from those higher global prices because the United States
The United States is the world’s leading gas producer, with all the fuel it needs for domestic use, while capacity constraints
inhibit exports of more LNG no matter how much world prices rise.
Data provider Refinitiv said average gas production in the lower 48 US states rose to 94.3 billion cubic
feet per day (bcfd) so far in April from 93.7 bcfd in March. That compares with a monthly record of 96.3 bcfd.
in December 2021.
On a daily basis, however, production was on track to drop by around 3.9 bcfd in the last three days to a
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preliminary 91.6 bcfd on Tuesday, the lowest since early February. Traders said most of those drops were
caused by freezing wells in North Dakota and the Rocky Mountains. Those wells are likely to be back in service during the
next week or so as the weather warms up. Preliminary data is often revised.
Refinitiv projected average US gas demand, including exports, to drop from 92.2 bcfd this week to
90.6 bcfd next week. Those forecasts were similar to Refinitiv’s outlook on Monday.
The amount of gas flowing to US LNG export plants fell from a record 12.9 bcfd in March to 12.3 bcfd, so
away in April primarily due to declines at Freeport LNG facilities in Texas. America can turn around 13.2
bcfd of gas in LNG.
Since the United States will not be able to produce much more LNG any time soon, the country has worked
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with allies to divert LNG exports to Europe to help European Union (EU) and other countries break their
dependence on Russian gas.
Russia, the world’s second largest gas producer, provides between 30% and 40% of Europe’s gas, with a total of approximately
18.3 bcfd in 2021.
Week ended Week ended One year ago Five years
Apr 22 Apr 15 Apr 22 average
(Forecast) (Current) April 22
US natural gas storage weekly change (bcf): +24 +53 +18 +53
Total US natural gas in storage (bcf): 1,474 1,450 1,896 1,795
Total US storage vs. 5-year average -17.9% -16.8%
Benchmark Global Gas Futures ($ per mmBtu) Current Day Previous Day This Month Previous Year Five Years
Last year average Average
2021 (2017-2021)
Henry hub 6.96 6.67 2.69 3.73 2.89
Title Transfer Facility (TTF) 28.84 29.24 7.15 16.04 7.49
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Japan Korea Marker (JKM) 25.40 25.50 7.80 18.00 8.95
Refinitiv Heating (HDD), Cooling (CDD), and Total (TDD) Degree Days
Total Two-Week Forecast Current Day Previous Day Previous Year 10 Years 30 Years
norm norm
US GFS Hard Drives 102 108 102 108 103
US CDD GFS 69 62 55 53 53
GFS US TDD 171 170 157 161 156
Refinitiv US GFS Weekly Supply and Demand Forecasts
Previous week Current week Next week This week Five years
Last year’s average for
Month
US supply (bcfd)
US Low 48 Dry Production 94.2 93.9 94.7 91.9 84.8
US imports from Canada 8.2 8.7 8.3 7.6 7.8
US LNG imports 0.0 0.0 0.0 0.0 0.1
Total US Supply 102.4 102.6 103.0 99.5 92.7
US demand (bcfd)
US exports to Canada 2.6 3.0 2.9 2.4 2.6
Exports from the United States to Mexico 6.4 6.1 6.0 6.1 4.6
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US LNG exports 12.0 12.2 12.4 11.4 5.2
US Commercial 9.3 7.6 6.6 6.8 8.3
US Residential 13.2 9.8 7.9 8.4 11.8
US power plant 25.4 24.7 26.5 25.7 24.0
US industrials 22.8 22.1 21.7 22.1 22.0
US fuel oil 4.7 4.6 4.7 4.7 4.6
US pipeline distribution 2.1 1.9 1.8 1.9 2.2
US Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total US consumption 77.5 70.8 69.3 69.7 73.0
Total US demand 98.6 92.2 90.6 89.6 85.4
US Percentage of Weekly Power Generation by Fuel – EIA
Week Ended Week Ended Week Ended Week Ended Week Ended
April 29 April 22 April 15 April 8 April 1
Wind 19 16 17 15 15
solar 4 4 4 4 4
Hydro 6 7 7 8 8
Other 2 2 2 2 2
Oil 0 0 0 0 0
Natural Gas 30 33 32 33 32
Coal 18 19 19 19 19
Nuclear 20 19 19 19 20
SNL US Natural Gas Overnight Prices ($ per mmBtu)
Hub Current day Previous day
Henry’s Center
Transco Z6 New York
PG&E Citygate
southern domain
chicago city gate
Algonquin Town Gate
Citygate Southern California
waha center
AECO
SNL US Power Overnight Prices ($ per megawatt-hour)
Current day hub
New England
PJM West
Ercot North
middle C
green stick
SP-15
(Reporting by Scott DiSavino; Editing by Jonathan Oatis and Nick Zieminski)
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Reference-financialpost.com