FINWIRES · TerminalLIVE
FINWIRES

US Natural Gas Update: Prices Rise on Hotter Forecasts for the South and West

By

US natural gas prices pared gains in after-hours trading on Friday but ended the session in positive territory as forecasts for hotter weather raised expectations for stronger gas-fired power generation and increased air-conditioning demand.

The front-month Henry Hub contract and the continuous contract rose by 0.80% to $2.755 per million British thermal units.

The Commodity Weather Group said Friday that forecasts had shifted hotter, with above-average temperatures expected across Texas, the Southwest and the Interior West through Sept. 4.

The expected heatwave caused the Electric Reliability Council of Texas, or ERCOT, the state's largest power grid operator, to forecast that electricity demand from Friday through Tuesday would exceed its all-time record set in July.

Overall, US electricity generation also remained above year-ago levels. The Edison Electric Institute said Lower 48 electricity output in the week ended Aug. 15 rose 2.36% from a year earlier to 101,498 GWh. Output over the 52 weeks ended Aug. 15 increased 2.24% year on year to 4,359,446 GWh.

At the same time, strong domestic gas production continued to weigh on the market. Barchart, citing BNEF data, estimated Lower 48 dry gas production at 113.1 Bcf/d on Friday, up 4.4% from a year earlier. Lower 48 state gas demand was estimated at 80.9 Bcf/d, 2.7% higher year on year.

Net gas flows to US LNG export terminals were estimated at 17.7 Bcf/d, down 2.6% from a week earlier. Trading Key said export demand remains limited due to a maintenance turnaround at Freeport LNG and slow capacity ramp-ups at Golden Pass.

The Energy Buyers' Report said the market's fundamental backdrop remained relatively soft despite Friday's rebound, with inventories still at healthy levels and cooling demand gradually losing seasonal support.

The latest data from the US Energy Information Administration showed utilities added 16 Bcf to underground storage in the latest week, below both the 19 Bcf injection a year earlier and the five-year average injection of 29 Bcf.

Total working gas in storage stood at 3,169 Bcf, down 28 Bcf, or 0.9%, from year-ago levels but 185 Bcf, or 6.2%, above the five-year average for the same week.

Related Articles

Commodities

Tata Steel Completes 23% Acquisition of TM International Logistics

Tata Steel (BOM:500470, NSE:TATASTEEL) completed the acquisition of a 23% stake in TM International Logistics for 3.35 billion rupees, according to a Thursday filing.The company acquired 4.1 million shares from IQ Martrade Holding and Management, following approval from the Competition Commission of India.Following the transaction, Tata Steel holds a 74% stake in TM International Logistics, while NYK Holding Europe retains 26%.TM International Logistics has consequently become a subsidiary of Tata Steel.

BOM:500470NSE:TATASTEEL
Commodities

US Oil Update: Futures Rally as Trump Targets Iran's Economy

Crude futures settled higher in after-hours trading on Thursday as President Trump's threat to crush the Iranian economy further clouded the prospect of a deal to end the Middle East conflict.Front-month West Texas Intermediate crude futures advanced by 2.7% to $88.15 per barrel, while Brent futures gained 1.8% to $93.22/bbl.Gelber & Associates said that with the US and Iran showing little progress toward an agreement, restricted shipping and elevated insurance costs are keeping a sizable geopolitical premium.The US Treasury Department on Thursday sanctioned three individuals over links to Iran's Islamic Revolutionary Guard Corps-Qods Force and Hezbollah, as part of a broader sanctions package.The US Treasury's Office of Foreign Assets Control alleged that the network used couriers traveling on commercial airline flights between Lebanon, Turkiye, the UAE, and Iran to move up to hundreds of millions of dollars between jurisdictions.The blacklisting comes after Trump warned Wednesday of potential "economic warfare" against Iran in a Truth Social post, while Treasury Secretary Scott Bessent reportedly said that he plans to detail the new sanctions Monday.Soojin Kim, research analyst at MUFG, said that the move marks a continued shift from military action toward economic pressure, aimed at forcing Iran back into negotiations over the war, its nuclear program and the Hormuz.The US president said any country whose financial institutions, businesses, airports, or government entities offer Iran a "lifeline" will face what he described as tremendous economic consequences of their own.He said oil smuggling, currency swap lines, cash transfers, exchange houses, ship registries and front companies were channels he wants shut down immediately, emphasizing that Iran will never be permitted to acquire a nuclear weapon.However, Iran pushed back against Trump's claim that the country is on the brink of economic collapse, with Iranian Foreign Minister Abbas Araqchi calling the US President's comments an attempt to divert American public opinion from domestic problems, including record debt and rising interest rates.Trump's Economic D-Day announcement comes after the UAE said Wednesday it was halting all trade and financial transactions with Iran after the Gulf state accused Tehran of firing ballistic missiles at its territory, ramping up regional tensions.RBC Capital Markets strategists said that crude prices have been whipsawed by both sentiment around the Iran conflict and the reality on the water, but paper markets have best reflected the sentiment of those actively trading the market rather than overall market sentiment.Meanwhile, Yemen's Houthis said on Thursday that they carried out two drone attacks on Saudi Arabia, targeting a sensitive target at Najran airport and an Aramco facility in Najran.

Commodities

US Power Update: PJM Hits $543.30/MWh Intraday Peak as Gas Leads Generation

US power prices varied widely across major markets at 4 p.m. ET, with PJM posting the highest price at $91.48 per megawatt-hour and an intraday peak of $543.30/MWh, according to data from GridStatus.io.Electric Reliability Council of Texas' real-time LMP stood at $28.13/MWh at 4 p.m. ET. Net load was 48.33 GW, with natural gas making up the largest share of generation at 38.5%.California Independent System Operator's real-time LMP came in at $37.09/MWh at 4 p.m. ET. Net load totaled 8.56 GW, while solar led the generation mix at 55.3%. The session's intraday peak reached $100.02/MWh at 6:50 a.m. ET.Southwest Power Pool's real-time LMP reached $37.65/MWh at 4 p.m. ET. Net load stood at 48.08 GW, with natural gas accounting for the largest share of generation at 44.6%.PJM's real-time LMP was $91.48/MWh at 4 p.m. ET. Net load totaled 116.95 GW, with gas accounting for the largest share of the generation mix at 47.1%. Prices surged to an intraday high of $543.30/MWh at 8 a.m. ET.Midcontinent Independent System Operator's real-time LMP came to $33.91/MWh at 4 p.m. ET. Net load was 82.83 GW, with natural gas contributing the largest share at 33.7%.New York Independent System Operator's real-time LMP stood at $59.65/MWh at 4 p.m. ET. Net load reached 21.92 GW, while dual-fuel sources accounted for the largest share of generation at 32.7%. Prices climbed to $107.42/MWh at 2:35 p.m. ET.ISO New England's real-time LMP climbed to $125.10/MWh at 4 p.m. ET. Net load totaled 18.1 GW, with natural gas leading the generation mix at 61.1%. An intraday high of $304.37/MWh was recorded at 1:05 p.m. ET.Independent Electricity System Operator's real-time LMP was $35.99/MWh at 4 p.m. ET. Net load was 18.02 GW at 3:55 p.m. ET, when nuclear supplied the largest share of generation at 42%.The National Weather Service's Climate Prediction Center forecasts above-normal temperatures across much of the West and South from Aug. 28-Sept. 3, with near-normal temperatures in parts of the West and near-normal to below-normal readings across the Northeast.