"Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas

[Tom Nolan + 2,441]

7:28am REUTERS Dec 7

https://finance.yahoo.com/news/u-natgas-futures-rise-3-132844335.html

U.S. natgas futures rise 3% on colder weather forecasts

Dec 7 (Reuters) - U.S. natural gas futures rose about 3% on Wednesday on forecasts of colder weather and higher heating demand over the next two weeks than previously expected. That colder weather should force utilities to pull more gas from storage. Gas stockpiles were about 2.4% below the five-year (2017-2021) average for this time of year.

Gas futures rose despite Freeport LNG's announcement last week that it expects to delay the restart of its liquefied natural gas export plant in Texas from mid-December to the end of the year. Some analysts, however, do not expect Freeport to return until January, February or even later as it will likely take federal pipeline safety regulators longer than Freeport thinks to review and approve the plant's restart plan once the company submits it. At least one LNG vessel - Prism Brilliance - gave up on Freeport after the company delayed the planned restart last week, according to ship tracking data from Refinitiv. The ship is now on its way to Jamaica. But, a couple of ships - Prism Diversity and Prism Courage - were still waiting in the Gulf of Mexico to pick up LNG from Freeport. The plant, which can turn about 2.1 billion cubic feet per day (bcfd) of gas into LNG, shut on June 8 due to an explosion caused by inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired by the company to review the incident and suggest corrective actions.

Front-month gas futures for January delivery on the New York Mercantile Exchange rose 18.4 cents, or 3.4%, to $5.653 per million British thermal units (mmBtu) at 8:04 a.m. EST (1304 GMT). On Tuesday, the contract closed at its lowest since Oct. 27 for a second day in a row. U.S. gas futures were up about 53% so far this year as much higher global prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's invasion of Ukraine.

Gas was trading at $44 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $33 at the Japan Korea Marker (JKM) in Asia. TOP PRODUCER U.S. gas futures lag global prices because the United States is the world's top producer with all the fuel it needs for domestic use, while capacity constraints and the Freeport outage have prevented the country from exporting more LNG.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.6 bcfd so far in December, up from a monthly record of 99.5 bcfd in November. With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 118.0 bcfd this week to 121.3 bcfd next week. Those forecasts were higher than Refinitiv's outlook on Tuesday.

The average amount of gas flowing to U.S. LNG export plants held around 11.8 bcfd so far in December, the same as in November. That compares with a monthly record of 12.9 bcfd in March. The seven big U.S. export plants can turn about 13.8 bcfd of gas into LNG. During the first 11 months of 2022, roughly 67%, or 7.1 bcfd, of U.S. LNG exports went to Europe as shippers diverted cargoes from Asia to get higher prices. Last year, just 29%, or about 2.8 bcfd, of U.S. LNG exports went to Europe. Russia, the world's second-biggest gas producer, provided about a third of Europe's gas in recent years, totaling about 18.3 bcfd in 2021.

The European Union, however, wants to cut Russian gas imports by two-thirds by 2022 end and refill stockpiles to 80% of capacity by Nov. 1 and 90% by Nov. 1 each year from 2023. Week ended Week ended Year ago Five-year Dec 2 Nov 25 Dec 2 average (Forecast) (Actual) Dec 2 U.S. weekly natgas storage change (bcf): -40 -81 -59 -49 U.S. total natgas in storage (bcf): 3,443 3,483 3,513 3,520 U.S. total storage versus 5-year average -2.2% -2.4% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 5.68 5.47 3.86 3.73 2.89 Title Transfer Facility (TTF) 43.43 43.26 37.67 16.04 7.49 Japan Korea Marker (JKM) 32.85 33.19 37.84 18.00 8.95 Refinitiv Heating (HDD),......

[Tom Nolan + 2,441]

Wednesday Dec 7th

Dutch front-month natural gas futures traded around €149/MWh, higher than a six-month low of €97.8/MWh touched on November 11th, as temperatures started falling, raising gas demand for heating and pressuring stocks. For the next two weeks, Europe will face cold temperatures due to an Arctic blast that will hit the UK and Nordic countries mostly. Storages in the EU were 90.9% full as of December 5th, compared to 91.3% the day before. Although reserves remain fuller than normal and large LNG imports have compensate for the drop in Russian gas flows, the outlook remains challenging with many analysts suggesting demand will need to fall further and more imports of LNG will be needed to pass through winter months. Europe and the UK imported a record high of 11.14mm tonnes of LNG in November, and are on course to receive 12.2mn tonnes in December but gas demand in the EU was cut by a quarter last month and governments have already warned about possible power cuts.

https://tradingeconomics.com/commodity/eu-natural-gas

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Natural-Gas/US-LNG-Is-Booming-But-Who-Supplies-The-Gas.html

U.S. LNG Is Booming, But Who Supplies The Gas?

By Alex Kimani - Dec 04, 2022, 6:00 PM CST

•  In the current year, five developers have signed over 20 long-term deals to supply more than 30 million metric tons/year of LNG.
• Pundits are asking if the United States can ramp up production to meet future demand.
•  It’s going to be a real challenge for the United States to meet future LNG demand.

Join Our Community

This year, the United States became the world's biggest liquefied natural gas (LNG) exporter as deliveries to energy-starved buyers in Europe and Asia surged. In the current year, five developers have signed over 20 long-term deals to supply more than 30 million metric tons/year of LNG to energy-starved buyers in Europe and Asia. As energy analysts RBN Energy notes, the first wave of LNG export expansion has mostly gone smoothly thanks to fast-rising natural gas supplies in the Lower 48 and a slew of pipeline reversals and expansions that allowed low-cost Marcellus-Utica gas supplies to reach Gulf Coast markets. But with LNG demand already high and set to grow at a frenetic pace, the big question becomes how quickly can the United States ramp up production to meet future demand?

There’s been no shortage of long-term offtake deals signed by multiple U.S. gas producers. 

In June, German utility EnBW announced that it had signed a 20-year deal for a substantial supply of LNG from U.S.-based exporter Venture Global. In the same month, Energy Transfer LP (NYSE: ET) signed an LNG sale and purchase agreement (SPA) with China Gas Holdings; Chevron Inc. (NYSE: CVX) signed a 4mtpa LNG offtake deal with Venture Global and Tellurian Inc. (NYSE: TELL) signed an LNG sales and purchase agreement (SPA) with commodity trader Vitol. In July, Cheniere Energy (NYSE: LNG) signed an offtake deal with Thailand's state-owned energy company PTT. Finally, in September, Australian energy giant Woodside Energy Group Ltd finalized offtake agreements for U.S. supply from Commonwealth LNG. 

Related: Power Prices Scream Higher In Europe As Wind Power Slumps

Overall, offtakers have committed to more than ~31 MMtpa of U.S. LNG supply, with term lengths ranging from 15 to 25 years. But a lot more than that is likely to be demanded over the next couple of years. 

RBN estimates that “…there’s another 100 MMtpa (14.3 Bcf/d) or so of proposed LNG export capacity with a medium-to-high chance of progressing in the next three years, including at least three projects totaling almost 19 MMtpa (2.5 Bcf/d) that we believe are highly likely to take FID within the next 12 months. That’s out of a universe of nearly 30 projects we track in the LNG Voyager Quarterly, representing over 280 MMtpa (38.3 Bcf/d) of potential export capacity, the bulk of it along the Texas and Louisiana coasts.”

According to RBN, availability of feedgas supply where and when it is needed is going to be one of the major factors that will influence the timing and commercialization of future LNG projects.

Where will all the gas come from?

RBN notes that the Appalachia was, by far, the biggest contributor to U.S. natural gas growth over the last decade. During the timeframe, Lower 48 dry gas production climbed nearly 30 Bcf from an average 70 Bcf/d in 2014 to 99.6 Bcf/d currently, during which Appalachian output more than doubled and drove 18.5 Bcf/d of that overall growth. The Permian came in a distant second, growing production by 11.2 Bcf/d while the Eagle Ford saw production decline by 1 Bcf/d. Meanwhile, the Haynesville was the third-fastest-growing region on an absolute volume basis, up from 9.5 Bcf/d in 2014 to 15.3 Bcf/d currently. Finally, the Anadarko, Niobrara and Bakken rose by a combined 4.6 Bcf/d over the timeframe.

However, the energy experts have predicted that the second wave of U.S. LNG growth will favor the southern basins. RBN estimates that Appalachia has the potential to ramp up production by almost 8 Bcf/d to 42 Bcf/d over the next 10 years if unconstrained by pipeline takeaway capacity. However, the analysts say that’s unlikely to happen given strong headwinds for midstream development in the region. The Appalachian Basin is the country’s largest gas-producing region, churning out more than 35 Bcf/d. Unfortunately, environmental groups have repeatedly stopped or slowed down pipeline projects and limited further growth in the Northeast. Indeed, EQT Corp. (NYSE: EQT) CEO Toby Rice recently acknowledged that Appalachian pipeline capacity has “hit a wall.” As a result, RBN says production growth in the basin is likely to be closer to just 3 Bcf/d, capping production at just under 38 Bcf/d on an annual average. 

Meanwhile, growth in the Anadarko, Niobrara and Bakken is likely to remain modest, altogether adding ~3.3 Bcf/d to reach almost 15.5 Bcf/d by 2032. In other words, the bulk of U.S. LNG growth in this post-shale-boom era will come from the Texas and Louisiana basins. RBN notes that both the Permian and Haynesville have been at the epicenter of midstream development in recent months while the Eagle Ford has been showing signs of a production recovery of late, after a decline in recent years.

Analysts at East Daley Capital Inc. have projected that U.S. LNG exports will grow to 26.3 Bcf/d by 2030 from their current level of nearly 13 Bcf/d. For this to happen, the analysts say another 2-4 Bcf/d of takeaway capacity would need to come online between 2026 and 2030 in the Haynesville alone.

“This assumes significant gas growth from the Permian and other associated gas plays. Any view where oil prices take enough of a dip to slow that activity in the Permian and you’re going to have even more of a call for gas from gassier basins,” the analysts have said.

Either way, it’s going to be a real challenge for the United States to meet those targets because takeaway constraints including limited pipeline capacity are seen as the biggest hurdle to growth of the sector despite the country being home to the world’s largest backlog of near-shovel-ready LNG projects.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

• Steel Prices Hammered By China’s Zero-Covid Flip-Flop
• Azerbaijan And Georgia Aim To Become An Energy Bridge To Europe
• Higher Oil Prices May Convince OPEC To Maintain Production

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Energy-General/Trafigura-Europe-Will-Need-To-Import-Huge-Volumes-Of-LNG-In-2023.html

Trafigura: Europe Will Need To Import Huge Volumes Of LNG In 2023

By Charles Kennedy - Dec 08, 2022, 9:00 AM CST

• Trafigura: the gap in gas supply in Europe will be much wider without Russian gas.
• Trading giant sees continued volatility in natural gas and LNG markets.
• Europe needs huge volumes of imported LNG in 2023 to avoid blackouts: Trafigura.

Join Our Community

With the plunge in Russian pipeline gas deliveries, Europe will need “huge volumes” of LNG next year, commodity trader Trafigura said on Thursday, adding it expects continued volatility in the natural gas and LNG markets.

“Looking forward, we expect gas and LNG markets to remain volatile,” Trafigura said in its annual report for the year to September 30, in which one of the world’s largest independent commodity traders posted a record-high net profit of $7 billion.  

“While Europe should avoid a blackout this winter by drawing on inventories and cutting demand, it will need to import huge volumes of LNG in 2023 given the massive reduction in flows from Russia,” Trafigura said in an overview of its performance and outlook for the near term.

Natural gas prices in Europe will have to remain elevated so that the continent can continue to attract most of the LNG cargoes in competition with the other key demand centers, according to Trafigura.

The commodity trader expects Europe to continue to prioritize the security of supply “through next winter and beyond.” 

The United States has been shipping record volumes of LNG to Europe this year to help EU allies. A total of 72% of all U.S. LNG cargoes were headed to Europe in November, according to estimates cited by Reuters. 

However, the significant drop in Russian gas supply this year occurred only in June, meaning that Europe could still stock up on some Russian gas earlier this year.

Ahead of the winter of 2023/2024, the gap in gas supply in Europe will be much wider without Russian gas. Europe will not be importing much Russian gas—or none at all if Russia cuts off deliveries via the one link left operational via Ukraine and via TurkStream—compared to relatively stable imports from Russia in the first half of this year, before Moscow started gradually cutting volumes via Nord Stream in June until shutting down the pipeline in early September.   

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

• Germany Is Preparing A Windfall Tax For Solar And Wind Generators
• U.S. Drivers Could Get Under $3 Gasoline For Christmas
• Russia Boosting Natural Gas Supply To China

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Natural-Gas/US-To-Bail-Out-Britain-By-Doubling-Natural-Gas-Exports.html

U.S. To Bail Out Britain By Doubling Natural Gas Exports

By City A.M - Dec 08, 2022, 10:00 AM CST

• The UK is grappling with sky-high energy prices. 
• The Biden administration has agreed to double U.S. natural gas exports to Britain.
• The initiative has an “immediate goal” of stabilizing energy markets and reducing demand.

Join Our Community

Under fresh plans to clamp down on the rising cost of living across the UK, the government has convinced the Biden administration to double US gas exports to Britain.

Prime Minister Rishi Sunak pledged that the new partnership to boost energy security, efficiency and affordability will cut prices for Britons and ensure the UK’s national supply can “never again be manipulated by the whims of a failing regime.”

The initiative has an “immediate goal” of stabilising energy markets and reducing demand, while seeking to build long-term resilience by accelerating the shift to clean alternatives.

This will involve promoting nuclear fuels as a “safe” and “reliable” part of the transition, expediting the development of clean hydrogen, and driving international investment in offshore wind and carbon capture.

Double of 2021 levels

As part of efforts to drive down the cost of living, the US will aim to export at least nine to 10 billion cubic metres of liquified natural gas to UK terminals over the next year, more than doubling the level in 2021.

The partnership will be steered by a new UK-US joint action group, led by senior officials from the British Government and the White House, with the first meeting held virtually on Thursday.

The Prime Minister and US president Joe Biden are not expected to attend.

Rishi Sunak said the partnership will help end Europe’s dependence on Russian energy “once and for all” and bring down prices for British consumers.

“Together the UK and US will ensure the global price of energy and the security of our national supply can never again be manipulated by the whims of a failing regime” said Rishi Sunak

“We have the natural resources, industry and innovative thinking we need to create a better, freer system and accelerate the clean energy transition.”

Citing the war in Ukraine, Sunak and Biden said in a joint statement that it is “more important than ever” for allies to work together to build “resilient international systems”.

“Our immediate shared goal to stabilise energy markets, reduce demand, and ensure short-term security of supply is underpinned by the longer-term objective of supporting a stable energy transition to achieving net zero emissions by 2050, which in itself will strengthen our energy security,” they said.

“To this end, we are establishing a Joint Action Group for Energy Security and Affordability to accelerate our immediate cooperation on short-term action to support energy security and affordability in the United Kingdom and across Europe.”

By CityAM

More Top Reads From Oilprice.com:

• Oil Falls As Markets Fear Further Action From U.S. Fed
• Russia Bets On Growing ‘Dark Fleet’ To Ship Its Oil
• Russia Claims Price Cap Won’t Seriously Hit Its Oil Production

[Blackbag99 + 20]

Propane - 2022 Data - 2009-2021 Historical - 2023 Forecast - Price - Quote - Chart (tradingeconomics.com)

 

Let's be honest you don't have to look far to see how Nat Gas replacements are doing. Its going to get ugly soon

[Tom Nolan + 2,441]

https://archive.vn/NLz6R

End of triple-dip La Niña in sight: What it could mean for spring severe weather season

[Tom Nolan + 2,441]

Weather Watcher 14 YouTube

https://www.youtube.com/@WeatherWatcher14/videos

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

https://www.zerohedge.com/weather/long-delayed-cold-weather-blanket-much-us

Long-Delayed Cold Weather To Blanket Much Of US

by Tyler Durden

Thursday, Dec 08, 2022 - 01:25 PM

An update to the Climate Prediction Center's official 8-14 day outlook for pre-Christmas forecasts more than two-thirds of the Lower 48 will be colder than average, with near-normal temperatures for the Mid-Atlantic and above-average temperatures for the Northeast. 

NOAA's temperature outlook forecasts the West, Southwest, and Midwest, as well as parts of the Southeast (excluding coastal areas), will experience below-average temperatures between Dec.15-21. The forecast was issued on Dec. 7. As for the Mid-Atlantic, temperatures are expected to be around average, while temperatures in the Northeast will be above average. 

Lower 48 average temperatures are currently well above average. On Wednesday, the national average was 10 degrees above a 30-year mean, though forecasts show a cold pattern will begin at the end of this week and push temperatures down well below average through Dec. 21. 

Heating demand is expected to rise ahead of Christmas. 

Houston-based energy firm Criterion Research pointed out on Nov. 23, "The United States has officially flipped over to withdrawal season." 

US natural gas futures bid yesterday after falling more than 27% since late November after weather forecasts for the US switched from cold to warm. Cold weather is finally on the way, which could put a bid under NatGas. 

As for the Northeast, The Washington Post said, "The Mid-Atlantic and Northeast still appear on track to turn more wintry during the second half of the month. As Christmas approaches, if you're rooting for snow, waiting is often the hardest part." 

 

[Tom Nolan + 2,441]

https://www.zerohedge.com/weather/arctic-blast-batters-europe-natgas-prices-rise-inventories-fall

Arctic Blast Batters Europe As NatGas Prices Rise, Inventories Fall

by Tyler Durden

Friday, Dec 09, 2022 - 01:45 AM

A continuing cold blast across Europe, something we pointed out at the first of the month was forecasted to happen, has led to higher energy prices and drawn down NatGas inventories. 

We explained on Dec. 1 that a weather phenomenon known as a "Greenland blocking" event would pour cold Arctic air over Europe in the first half of the month.

IMAGE - https://twitter.com/ChartsClimate/status/1600813378645086211?ref_src=twsrc^tfw|twcamp^tweetembed|twterm^1600813378645086211|twgr^d3beeec371350f6e9d9b14143b9c12322eec182a|twcon^s1_&ref_url=https%3A%2F%2Fwww.zerohedge.com%2Fweather%2Farctic-blast-batters-europe-natgas-prices-rise-inventories-fall

Latest forecasts via Bloomberg show average temperatures across Northwest Europe are expected to continue sliding well below a 30-year trendline to around 27 degrees Fahrenheit by Dec. 18. 

The cold blast has already boosted heating demand across the energy-stricken continent. The forecast for even colder weather next week will indicate even larger future NatGas draws from storage. 

After building up inventories to nearly 96% full last month due to warmer autumn weather, the injection to withdrawal flip is about a month in and drained about 5% of storage to 90% full. Seasonally, the withdrawal period is well underway, so draws will continue for the next several months (as long as there is cold weather). 

What could drive levels down even further are vicious cold snaps. 

Europe's winter temperatures have taken a while to arrive, but now seem to be coming in at full strength. Gas storage sites are still relatively full for the time of year, but risks still linger that a severe cold spell could quickly deplete stocks, leaving the continent exposed to any new supply curtailments. -Bloomberg 

IMAGE -

Australia's ANZ Bank wrote that forecaster Maxar said the weather outlook for the next few weeks would be extremely cold for the UK and Nordics. Heading into the cold season, traders saw NatGas supplies at ample levels, and some expected Europe would easily survive this winter without a crisis. However, politicians in France are already warning about potential power cuts due to issues with nuclear power generation, while the lack of grid interconnectivity with other countries could result in power crunches. 

Dutch front-month NatGas futures, Europe's benchmark, have rebounded more than 52% to 150 euros per megawatt-hour since Nov. 11 on colder weather forecasts. 

Month-ahead German, French, and UK power are rising as it becomes more expensive to fuel the continent's power generation stations. 

As we explained earlier this month, this cold blast will be the first proper test of the EU's power grid. 

[Tom Nolan + 2,441]

https://www.zerohedge.com/energy/perfect-storm-fuels-massive-natural-gas-price-spikes-west-coast

Perfect Storm Fuels Massive Natural Gas Price Spikes On West Coast

by Tyler Durden

Saturday, Dec 10, 2022 - 05:30 PM

Authored by Leticia Gonzales via NaturalGasIntel.com,

Against a backdrop of mostly mild weather across the Lower 48, winter unleashed its fury on the West Coast a bit early this season. The frigid temperatures and unusually heavy precipitation have fueled natural gas demand at a time when storage inventories are low, a drought has reduced hydro-electric power supplies and regional utilities are having trouble receiving coal deliveries.

The result: historically high natural gas prices that have surged to levels not seen since the summer of 2018. The surge in prices has spread across the Pacific Northwest, farther south throughout California and inland across the Rockies.

On Thursday, Northern California’s PG&E Citygate recorded spot natural gas prices as high as $36.00/MMBtu. SoCal Citygate cash reached a $33.00 high, while Malin hit $32.00. And that only proved to be batting practice.

On Friday, the highest price on the West Coast hit $55.00, with offers up to $60.00.

“I’ve seen prices spike before, but over a short period of time,” said Michael Wiliamson. His consulting firm Williamson Energy purchases wholesale natural gas for end-use customers in California.

“This sustained period of high prices has never happened before. There’s a lot of different things going on, and they’re all falling at the same time.”

Is It Really That Cold In California?

Bitter winter weather has slammed the West Coast this month, driving up heating consumption in a region that normally sees its highest energy needs in the summer.

The National Weather Service (NWS) said widespread heavy precipitation would begin to blanket the Pacific Northwest and Northern California on Friday and further over the weekend into the Northern Rockies, Great Basin and the rest of California. Anomalously high moisture associated with an atmospheric river was expected to usher in heavy mountain snow, as well as strong rains for lower elevations along the West Coast.

Snow totals should generally range between six inches and a foot for the higher elevations, according to NWS forecasters. Lighter accumulations of up to three inches were forecast for the interior valleys.

In the Sierra Nevada mountain range of California, several feet of snow were expected, while excessive rainfall was possible along the coast of southern Oregon and Northern California. Rainfall totals could reach up to four inches, NWS said.

Even still, with temperatures forecast to climb into the 60s in Los Angeles and into the mid-50s in San Francisco, “it’s not really that cold,” said Fuel and Purchased Power’s Marlon Santa Cruz, manager for the Los Angeles Department of Water and Power (LADWP). The executive said a key issue facing the region was that storage inventories are lagging behind.

Supplies Reclassified, Not Refilled

Pacific Gas & Electric Corp. (PG&E) in the summer of 2021 reclassified 51 Bcf of storage inventories to cushion gas, rather than working gas. It marked the largest reclassification in any one region, with some market observers calling the scale of the change “preposterous.”

Williamson said the problem wasn’t with the reclassification. It was that PG&E hasn’t rebuilt working gas inventories.

As of Dec. 2, Pacific stocks stood at only 217 Bcf, which is more than 18% below year-earlier levels and nearly 24% below the five-year average, according to the U.S. Energy Information Administration.

The Pacific is the only region that continues to fall significantly short of historical levels. After a string of above-average injections in the late fall, Mountain stocks sit about 6% below the five-year average. East inventories sit around 2% below that level. The South Central region, meanwhile, is now at a modest surplus.

“That’s the head of the nail,” Williamson said.

“If we had plenty of gas in storage, this wouldn’t be happening. Now, everyone is a hostage.”

With a client base that include commercial greenhouses and other small customers, the exorbitant prices are concerning, according to Williamson. He worries that if prices were to remain elevated – or climb even higher as the winter progresses – customers may be unable to pay their bills.

What’s more, the higher prices are not limited to California. In the Desert Southwest, spot gas prices at El Paso S. Mainline/N. Baja surged to $35.75 on Thursday, while the KRGT Del Pool rose to $32.85. By Friday, cash prices in the region also had rocketed to $55.00.

“At what point in time does a number get so high that people go bankrupt and stop paying their bills? I think we’re getting close to that point,” Williamson said.

He likened the situation to the fallout of Winter Storm Uri, where utilities filed for bankruptcy and spawned lawsuits and investigations into market manipulation. “People are going to grab lawyers instead of their pocketbooks.”

Other Issues

LADWP’s Santa Cruz agreed the storage situation in the West is a concern.

However, while stockpiles in Northern California remain short of what the market sees as comfortable through the winter, Aliso Canyon storage in Southern California has been “a savior” for the region as it copes with the heightened demand, he said. The storage facility, operating at a reduced capacity following a major leak in 2015, has often had to serve as a buffer during periods of strong demand.

In November 2021, the California Public Utilities Commission voted unanimously to increase the amount of gas stored at Aliso Canyon ito boost winter supplies for gas and electric customers. The decision was seen as an effort to ensure reliability for the region.

California may not be the friendliest state to the natural gas industry. Several municipalities have banned the use of new natural gas hook ups, including Los Angeles. Santa Cruz, though, said the municipal utility is relying on natural gas more because coal deliveries also are falling short.

President Biden earlier this month averted a strike among railroad workers that could have put a stop to coal deliveries. Still, the strike was only one issue plaguing the railroad industry.

Santa Cruz said following the Covid-19 pandemic, Union Pacific and other railroad companies were forced to lay off workers. Many of the laid off employees never returned as the economy recovered. Now there aren’t enough engineers to drive the trains, he said.

“There is an endemic supply chain issue impacting the coal industry,” Santa Cruz said.

“Despite the mines producing, it’s the railroad that can’t deliver the contractual volumes. We find ourselves unable to ramp those coal-fired units up as we normally would. So we make up that generation with natural gas.”

Meanwhile, West Coast customers find themselves battling for limited supplies.

Wood Mackenzie notified clients of maintenance on Gas Transmission Northwest’s system between Dec. 6 and 8 that had the potential to impact up to around 300,000 MMBtu/d of volumes flowing through Kingsgate.

In the Permian Basin, pipeline work on El Paso Natural Gas and the Permian Highway Pipeline also cut into gas deliveries. Ironically, these curtailments have sent prices in that region plunging below zero.

“All these constraints, and the market is fighting for stagnant supply,” Santa Cruz said. “This is unprecedented.”

 

 

 

[Tom Nolan + 2,441]

https://www.zerohedge.com/commodities/coast-coast-winter-storm-sends-us-natgas-surging

Coast-To-Coast Winter Storm Sends US NatGas Surging

by Tyler Durden

Monday, Dec 12, 2022 - 05:55 AM

In what's forecasted to be the first coast-to-coast major winter storm of the season across the Lower 48, traders have furiously panic bid US natural gas futures due to the prospects of increased heating demand.

On Sunday, wintery precipitation, powerful winds, and heavy rains battered Intermountain West as a powerful storm was set to traverse the rest of the country in the new week. The next stop for the storm is the Plains, South, and Northeast, according to The Weather Channel. 

Heavy mountain snow has already blanketed parts of California's Sierra. Snow will spread across the high country of Colorado and northern New Mexico today. Then this evening, the system moves into the Northern Plains. By night into Tuesday, heavy snow and strong winds could spark blizzard conditions across eastern Montana, eastern Wyoming, western Nebraska, the Dakotas, and Minnesota.

Later in the week, moisture from the storm and cold air will be in place in the East. However, it's still early to forecast where snow will fall in the Northeast. 

The storm is coupled with a cold blast pouring across the Lower 48 starting Friday. Temperatures are forecasted to dive between Friday and next Wednesday. 

Most of the Lower 48 could be well under average temperatures. 

Which means heating demand erupts. 

And why energy traders are bidding NatGas prices higher this morning. At one point, prices were up 12% to $7.010/mmbtu. 

Cold season is in -- drawing down on inventories began on Nov. 10 (read: "US Flips Into Withdrawal Season" As NatGas Prices Surge). 

Also, Freeport LNG is expected to ramp up exports out of its Texas facility soon, along with cold weather; this could keep a bid under NatGas prices this heating season. 

[Tom Nolan + 2,441]

EXCELLENT JOURNALISM !

https://oilprice.com/Latest-Energy-News/World-News/Freeport-LNG-Planning-On-Year-End-Restart.html

Freeport LNG Planning On Year-End Restart

By Julianne Geiger - Dec 14, 2022, 10:35 AM CST

FreeportLNG is planning on restarting its liquefaction facility by year end, the company told Oilprice on Wednesday, despite FERC’s new list of regulatory demands.

“We are in the process of reviewing the data received December 12 from the Federal Energy Regulatory Commission (FERC) and we are developing responsive documentation,” a spokeperson for FreeportLNG said in a statement to Oilprice, adding that the company was continuing to work towards the initial restart of its liquefaction facility at year end, “provided we obtain the necessary regulatory approvals required for the restart of our facility.”

FreeportLNG said that it continues to work collaboratively with regulatory agencies.

In August, Freeport targeted an initial production date of sometime in November, but that date was later pushed back. Freeport’s November update said it was targeting initial production from the facility sometime in mid-December, with full production not expected until March 2023.

But U.S. energy regulator FERC notified Freeport this week of a long list of 64 conditions that had to be met before it could approve the restart.

The 15 million tonne-per-year export terminal has been offline since June after suffering damage from an explosion caused by “isolation of a piping segment containing cryogenic LNG without proper overpressure protection, which LNG then warmed and expanded due to exposure to ambient conditions, resulting in a boiling liquid, expanding vapor explosion…and the rupturing of the piping segment,” according to a Freeport statement from earlier this month.

The Freeport closure has been hard on Europe, which has acutely felt the drop in LNG exports as it tries to wean itself off Russia while preparing for this winter’s heating season. But Europe saw some natural gas price relief earlier this week, with a 9% price slump, as LNG imports rose along with increasing nuclear output from France.

Germany’s first floating LNG terminal should start flows on December 22, further alleviating Europe’s gas crunch

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Prices Continue To Climb As China Reopens
• Is The Era Of Ever-Cheaper Lithium Batteries Over?
• Scientists Make Breakthrough In $40 Trillion Nuclear Fusion Push

SEE ALSO...

Freeport LNG Faces More Regulatory Hurdles Before Restart

By Julianne Geiger - Dec 13, 2022, 1:30 PM CST

https://oilprice.com/Latest-Energy-News/World-News/Freeport-LNG-Faces-More-Regulatory-Hurdles-Before-Restart.html

AND TUESDAY's

https://www.reuters.com/business/energy/us-regulator-issues-new-list-demands-freeport-lng-restart-2022-12-13/

 

[Tom Nolan + 2,441]

Wed, December 14, 2022 at 2:02 PM

 

https://finance.yahoo.com/news/1-u-natgas-futures-drop-200219159.html

 

UPDATE 1-U.S. natgas futures drop 7% on less cold forecasts

(Adds latest prices) Dec 14 (Reuters) - U.S. natural gas futures dropped about 7% on Wednesday on forecasts for less cold weather than previously expected in late December and after failing to break through a key level of technical price resistance for a third day in a row.

In the spot market, meanwhile, U.S. West Coast power and gas prices have almost tripled over the past couple of weeks and were on track to hit multiyear annual highs as freezing weather and snow blankets parts of California and gas pipeline outages and constraints limit flows into the region.

Futures prices fell even though output was on track to drop to a two-month low as extreme cold from North Dakota to Texas caused some oil and gas wells to freeze. That cold weather should force utilities to pull more gas from storage than usual in coming weeks. Gas stockpiles were about 1.6% below the five-year (2017-2021) average for this time of year.

Traders said the biggest uncertainty for the market remains whether Freeport LNG would restart its liquefied natural gas (LNG) export plant in Texas at the end of the year. Demand for gas will jump once the plant, which can turn 2.1 billion cubic feet per day (bcfd) of gas into LNG, returns to service. Some analysts, however, do not expect Freeport to return until January, February or later because it will likely take federal regulators longer than Freeport LNG expects to review and approve the plant's restart plan once the company submits it. The U.S. Federal Energy Regulatory Commission (FERC), one of the federal regulators that must approve Freeport's restart, this week called on the company to respond to a lengthy list of requirements, raising new hurdles to its efforts to resume operations. The Freeport plant shut on June 8 due to an explosion caused by inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired to review the incident and suggest corrective actions. Despite growing analysts' expectations that Freeport will not return until 2023, a couple of vessels - Prism Diversity and Prism Courage - have been waiting in the Gulf of Mexico since at least early November to pick up LNG from the plant. There were also a few vessels sailing toward the plant, with Elisa Larus expected to arrive in late December and Point Fortin and Prism Agility expected in early January.

Front-month gas futures fell 50.5 cents, or 7.3%, to settle at $6.430 per million British thermal units (mmBtu). The market tried and failed to boost the contract over the 200-day moving average for a third day this week, marking the average as a key point of technical price resistance.

Despite the price decline, futures are still up about 71% so far this year as much higher global prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's war in Ukraine. Gas was trading at $41 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $33 at the Japan Korea Marker (JKM) in Asia.

Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 99.7 bcfd so far in December, up from a monthly record of 99.5 bcfd in November. On a daily basis, however, output was on track to drop 2.3 bcfd to a preliminary two-month low of 97.3 bcfd on Wednesday as freezing weather blankets parts of Texas, Oklahoma and North Dakota, causing well freeze-offs. That would be the biggest daily output decline since mid October. Energy traders, however, noted preliminary data is often revised later in the day. With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would jump from 123.5 bcfd this week to 145.9 bcfd next week.

Week ended Week ended Year ago Five-year Dec 9 Dec 2 Dec 9 average (Forecast) (Actual) Dec 9 U.S. weekly natgas storage change (bcf): -42 -21 -83 -93 U.S. total natgas in storage (bcf): 3,420 3,462 3,430 3,427 U.S. total storage versus 5-year average -0.2% -1.6% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 6.57 6.94 3.86 3.73 2.89 Title Transfer Facility (TTF) 40.72 42.90 37.67 16.04 7.49....

[Tom Nolan + 2,441]

https://finance.yahoo.com/news/1-u-natgas-4-rising-153220960.html

REUTERS  Thu, December 15, 2022 at 11:30 AM

UPDATE 3-U.S. natgas jumps 8% as LNG exports rise, some wells shut due to cold

(Adds latest prices) Dec 15 (Reuters) - U.S. natural gas futures jumped about 8% to a two-week high on Thursday in a volatile week of trade on a bigger than expected storage draw, an increase in gas flows to liquefied natural gas (LNG) export plants and a drop in output as extreme cold from North Dakota to Texas caused oil and gas wells to freeze. Prices spiked despite forecasts for milder weather and lower heating demand in late December.

The U.S. Energy Information Administration (EIA) said utilities pulled 50 billion cubic feet (bcf) of gas from storage during the week ended Dec. 9, exceeding the 45-bcf decline analysts forecast in a Reuters poll and compared with a decrease of 83 bcf in the same week last year and a five-year (2017-2021) average decline of 93 bcf. Last week's decrease cut stockpiles to 3.412 trillion cubic feet (tcf), or 0.4% below the five-year average of 3.427 tcf for this time of year.

Traders said the biggest uncertainty for the market remains when Freeport LNG will restart its LNG export plant in Texas. After several delays, the company has said it was on track to restart the plant by the end of the year. Many analysts, however, have said they do not expect Freeport to return until the first quarter of 2023 because the company still has a lot of work to do to satisfy federal regulators before the plant is ready to restart. Once Freeport returns, demand for gas will rise. The plant can turn about 2.1 billion cubic feet per day (bcfd) of gas into LNG. Freeport shut on June 8 due to an explosion caused by inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired to review the incident and suggest action. A couple of vessels - Prism Diversity and Prism Courage - have been waiting in the Gulf of Mexico to pick up LNG from Freeport since at least early November. There are also several other ships sailing toward the plant, including Elisa Larus, which is expected to arrive in late December, Point Fortin and Prism Agility (early January) and Wilforce (late January). Despite the Freeport shutdown, the amount of gas flowing to U.S. LNG export plants hit 13.0 bcfd on Thursday, the most since June 4 - four days before Freeport shut. That is because the nation's six other big export plants were operating near full capacity. In a volatile week of trade, front-month gas futures for January delivery on the New York Mercantile Exchange rose 54.0 cents, or 8.4%, to settle at $6.970 per million British thermal units (mmBtu), their highest close since Nov. 29. So far this week, gas prices have jumped over 5% on Monday and Tuesday and dropped over 7% on Wednesday. Gas futures were up about 84% so far this year as much higher global prices feed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's war in Ukraine. Gas was trading at $42 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe and $33 at the Japan Korea Marker (JKM) in Asia.

[Tom Nolan + 2,441]

https://oilprice.com/Latest-Energy-News/World-News/EU-Price-Cap-Could-Force-ICE-To-Relocate-Its-Gas-Trading-Hub.html

EU Price Cap Could Force ICE To Relocate Its Gas Trading Hub

By Irina Slav - Dec 16, 2022, 2:00 AM CST

Exchange operator ICE has warned it is considering relocating its gas-trading business outside the European Union if the group approves a gas price cap.

The bloc has been discussing a cap on gas prices for months now, consistently failing to agree on one because of differences of opinion ranging from strong opposition in northern Europe to strong support from southern European members.

The European Commission tabled an official proposal for capping the price of gas in November but that proposal was met with reactions ranging from ridicule to ire. Critics among EU members noted the cap was too high to be considered an effective tool for keeping prices affordable and that the other condition for the cap to enter into effect - linked to LNG spot market prices - would mean it is unlikely to ever be used.

Critics from the financial services industry, including ICE, said at the time that the cap threatens the stability of the EU financial system, a sentiment echoed by the European Central Bank, too.

Traders and fund managers also said the cap would move a lot of gas trade over the counter where there is no transparency and a lot less regulation than on exchanges such as the ones operated by ICE.

"If agreed, the market correction mechanism will be imposed on customers and the market infrastructure with no time for resilient testing and thorough risk management," ICE said this week in a statement to Reuters.

"It is the responsibility of ICE as the market operator to consider all options if this mechanism is agreed, up to and including whether an effective market in the Netherlands is still viable," the exchange operator also said.

EU energy ministers are meeting again on Monday to discuss the control of gas prices. If they manage to strike a deal, the price cap will enter into effect from January next year.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• What’s In Store For Oilfield Service Companies In 2023?
• U.S. Drivers Could Get Under $3 Gasoline For Christmas
• Russia Boosting Natural Gas Supply To China

[Tom Nolan + 2,441]

Thursday U.S.

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-supported-by-eia-draw-lng-demand-output-drop-1231926

EXCERPTS

Last week’s decrease cut stockpiles to 3.412 trillion cubic feet (Tcf), or 0.4% below the five-year average for this time of year.

LNG Exports Rise

Reuters is reporting that despite the Freeport shutdown, the amount of gas flowing to U.S. LNG export plants hit 13.0 Bcfd on Thursday, the most since June 4 – four days before Freeport shut.

That is because the nation’s six other big export plants were operating near full capacity.

[Tom Nolan + 2,441]

REUTERS Frid Dec 16 afternoon U.S.

https://finance.yahoo.com/news/1-u-natgas-drops-5-195618809.html

UPDATE 1-U.S. natgas drops 5% on less cold forecasts in volatile week

 

(Adds latest prices) Dec 16 (Reuters) - U.S. natural gas futures dropped about 5% on Friday in what has already been a volatile week of trade on forecasts for less cold weather and heating demand later in December than previously expected.

That keeps U.S. gas futures on track for their most volatile year ever.

Both implied and historic volatility were expected to hit record highs in 2022 as soaring global gas prices this year feed demand for U.S. liquefied natural gas (LNG) exports due to supply disruptions and sanctions linked to Russia's war in Ukraine. Friday's price drop, meanwhile, came despite an increase in gas flows to U.S. LNG export plants and a drop in output this week as extreme cold from North Dakota to Texas caused oil and gas wells to freeze.

Traders said the biggest uncertainty for the market remains when Freeport LNG will restart its LNG export plant in Texas. After several delays from October to November to December, the company now says the plant is on track to restart by the end of the year.

Many analysts, however, do not expect Freeport to return until the first quarter of 2023 because the company still has a lot of work to do to satisfy federal regulators before the plant is ready to restart. Whenever Freeport returns, demand for gas will jump. The plant can turn about 2.1 billion cubic feet per day (bcfd) of gas into LNG for export, which is about 2% of U.S. daily production. Freeport shut on June 8 after a pipe failure caused an explosion due to inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired to review the incident and suggest action.

A couple of vessels - Prism Diversity and Prism Courage - have been waiting in the Gulf of Mexico to pick up LNG from Freeport since at least early November. There are also several other ships sailing toward the plant, including Elisa Larus, which is expected to arrive in late December, Point Fortin and Prism Agility (early January) and Wilforce (late January). Even without Freeport, the amount of gas flowing to U.S. LNG export plants hit 13.0 bcfd on Thursday, the most since June 4 - four days before Freeport shut. That is because the nation's six other big export plants were operating near full capacity. Front-month gas futures fell 37.0 cents, or 5.3%, to settle at $6.600 per million British thermal units (mmBtu)....

 

 

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Energy-General/The-Global-Gas-Crunch-Is-Set-To-Worsen-As-China-Reopens.html

The Global Gas Crunch Is Set To Worsen As China Reopens

By Irina Slav - Dec 14, 2022, 2:08 AM CST

• Chinese energy major CNOOC has forecast a seven percent increase in the country’s natural gas imports next year.
• The energy giant is already looking for LNG cargoes for next year as the country continues to ease its Covid restrictions.
• Pipeline imports from Central Asia are in decline while gas inventories in the north are already depleting at a faster rate than usual.

Join Our Community

China’s natural gas imports are set for a 7-percent rise next year as the country reopens after Covid lockdowns, which could aggravate an already tight supply situation globally.

The 7-percent import increase forecast was made by state-owned energy major CNOOC, which said, as quoted by Bloomberg, that it was already looking for LNG cargoes for next year.

The report notes that gas inventories at ports in the northern part of the country are depleting at a faster rate than usual because the weather is colder, pushing consumption higher, and this will, too, have an effect on future demand for imports.

What’s more, pipeline supply of natural gas from Central Asia is in decline, which means China will need to rely more on LNG in its gas import mix to make up the difference. And this means more intense competition for a limited number of cargoes between Asia and Europe next year as well.

This year, Chinese gas demand has been trending lower for most of the year, with imports declining consistently over the first ten months of the year, per a report by Energy Intelligence. LNG imports were down by a sizeable 21.6 percent over the ten-month period, reflecting the effects of lockdowns and other restrictions under the country’s zero-Covid policy.

Yet now this policy is being reversed, mass mandatory testing is being dropped and analysts expect a rebound in economic activity before too long. This will drive higher demand for energy and contribute to higher prices due to the tight supply situation in both oil and gas.

This reversal of Beijing’s Covid policy surprised many, who expected tepid demand for energy to continue in one of the world’s largest consumers. If activity rebounds fast, securing sufficient gas supply for the next heating season will likely become a major problem for most importers.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Prices Continue To Climb As China Reopens
• Is The Era Of Ever-Cheaper Lithium Batteries Over?
• Scientists Make Breakthrough In $40 Trillion Nuclear Fusion Push

[Tom Nolan + 2,441]

Monday Dec 19

EU approves measure to limit natural gas prices in effort to combat energy crisis

https://www.cnbc.com/2022/12/19/european-union-approves-cap-on-natural-gas-prices.html

• European Union energy ministers agreed to a “dynamic” cap on natural gas prices Monday after two months of intense negotiations.
• The mechanism will be automatically activated under two conditions: If front-month gas contracts exceed 180 euros ($191) per megawatt hour on the Dutch TTF for three working days in a row.
• And the price is 35 euros higher than a reference price for liquid natural gas on global markets for the same period.

[ARTICLE CONTINUES]

[Tom Nolan + 2,441]

https://oilprice.com/Latest-Energy-News/World-News/EU-Ministers-Agree-On-Gas-Price-Cap-Of-180-MWh.html

EU Ministers Agree On Gas Price Cap Of €180 MWh

By Alex Kimani - Dec 19, 2022, 11:00 AM CST

After initially hitting a dead-end amid deep divisions, EU ministers have finally reached an agreement to implement a  gas price cap of €180/MWh, far lower than the €275/MWh trigger originally suggested by the European Commission.

Pro-cap countries including Poland, Belgium and Greece had dismissed the original cap proposal as too high, arguing that it needs to be below €200/MWh if it is to tackle the high gas prices that the continent has grappled with this year. 

Interestingly, Germany has also voted to support the price cap despite having reservations that the price cap will negatively impact Europe's ability to attract gas supplies in tight and price-competitive global markets.

Under the current proposal, the EU price cap would not fall below €188/MWh, even in the event that the LNG reference price falls to far lower levels. However, the EU gas price cap would move with the LNG reference price if it increased to higher levels, while remaining €35/MWh above the LNG price. This system is designed to ensure the bloc can bid above market prices in order to attract gas in tight markets. 

Once triggered, the cap will prevent trades being done on the front-month to front-year TTF contracts at a price higher than €35/MWh above a reference price that comprises existing LNG price assessments.

Previously, the EC planned to tie benchmark European gas futures prices to the price of liquefied natural gas on the spot market. The “safety price ceiling” would be triggered automatically, when “the front-month TTF derivative settlement price exceeds €275 for two weeks” and, second, when “TTF prices are €58 higher than the LNG reference price for 10 consecutive trading days within the two weeks.” 

Both moves caused trepidation amongst gas traders. “Even a short intervention would have severe, unintended and irreversible consequences in harming market confidence that the value of gas is known and transparent,” said the European Federation of Energy Traders. 

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

• LNG Tanker Orders Soar 95% To Hit A Record High In 2022
• The Era Of Cheap Oil Has Come To An End
• Big Oil Pours Billions In The Permian Basin

[Tom Nolan + 2,441]

https://oilprice.com/Latest-Energy-News/World-News/LNG-Tanker-Orders-Soar-95-To-Hit-A-Record-High-In-2022.html

LNG Tanker Orders Soar 95% To Hit A Record High In 2022

By Tsvetana Paraskova - Dec 19, 2022, 7:00 AM CST

Europe’s rush to replace Russian gas and an expected years-long bull market for LNG supply and prices have also created a race for LNG carrier orders this year.  

With 2022 nearly at its end, the global order book so far this year has numbered 170 LNG carriers, a surge of 95% compared to full-year 2021, per data from Clarksons Research cited by Splash.

This year, new orders for LNG carriers also hit records in terms of prices for the newbuild vessels, according to Clarksons Research.

The market for LNG carrier orders widely outperformed the total ship order market, where 1,306 vessels have been ordered so far in 2022, down from 2,123 ship orders for the full year in 2021.

LNG day rates have surged this year as Europe raced to stock up on cargoes to fill its natural gas storage sites ahead of the winter.

So far this year, American LNG has been crucial in meeting demand in Europe, which has been scrambling for gas supply and willing to pay up for spot deliveries, outbidding most of Asia.  

The United States has shipped record volumes of LNG to Europe to help EU allies and around 70% of all American LNG exports have headed to Europe in recent months.

Next year, Europe will need even more LNG supply to offset low (or possibly non-existent) pipeline flows from Russia, analysts and industry players say.

With the plunge in Russian pipeline gas deliveries, Europe will need “huge volumes” of LNG next year, commodity trader Trafigura said earlier this month, adding it expects continued volatility in the natural gas and LNG markets. 

“While Europe should avoid a blackout this winter by drawing on inventories and cutting demand, it will need to import huge volumes of LNG in 2023 given the massive reduction in flows from Russia,” Trafigura said in its annual report for the year to September 30.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Oil Prices Continue To Climb As China Reopens
• Is The Era Of Ever-Cheaper Lithium Batteries Over?
• Scientists Make Breakthrough In $40 Trillion Nuclear Fusion Push

[Tom Nolan + 2,441]

https://oilprice.com/Latest-Energy-News/World-News/Citi-Commodity-Analyst-EU-Gas-Price-Cap-Numbers-Are-Silly.html

Citi Commodity Analyst: EU Gas Price Cap Numbers Are Silly

By Alex Kimani - Dec 19, 2022, 1:30 PM CST

Citi’s Global Head of Commodities Research Ed Morse has lambasted the EU’s new gas price cap, terming it as silly, impractical and unlikely to work in tight gas markets because gas markets are global and not bifurcated into individual countries, meaning the forces of demand and supply are more likely to prevail in determining gas prices, Bloomberg reports. 

As such, Morse says the price cap is likely to lead to gas shortages in Europe especially during winter months when demand is high. Further, the commodity analyst says that getting rid of the TTF natural gas benchmark is likely to cause chaos when determining gas prices especially if other existing benchmarks lack sufficient liquidity.

On Monday, EU ministers finally reached an agreement to implement a  gas price cap of €180/MWh, far lower than the €275/MWh trigger originally suggested by the European Commission. Pro-cap countries including Poland, Belgium and Greece had dismissed the original cap proposal as too high, arguing that it needs to be below €200/MWh if it is to tackle the high gas prices that the continent has grappled with this year. Interestingly, Germany also voted to support the price cap despite having reservations that the price cap will negatively impact Europe's ability to attract gas supplies in tight and price-competitive global markets.

Under the current proposal, the EU price cap would not fall below €188/MWh, even in the event that the LNG reference price falls to far lower levels. However, the EU gas price cap would move with the LNG reference price if it increased to higher levels, while remaining €35/MWh above the LNG price. This system is designed to ensure the bloc can bid above market prices in order to attract gas in tight markets. Once triggered, the cap will prevent trades being done on the front-month to front-year TTF contracts at a price higher than €35/MWh above a reference price that comprises existing LNG price assessments.

By Alex Kimani for Oilprice.com

More Top Reads From Oilprice.com:

• LNG Tanker Orders Soar 95% To Hit A Record High In 2022
• The Era Of Cheap Oil Has Come To An End
• Big Oil Pours Billions In The Permian Basin

[Tom Nolan + 2,441]

https://finance.yahoo.com/news/u-natgas-drops-9-less-130543762.html

Dec 20 TUES(Reuters) - U.S. natural gas futures dropped about 9% to a seven-week low on Tuesday on forecasts for the weather to turn warmer than normal in late December and early January.

That price drop came despite forecasts for colder weather and higher heating demand this week and next than previously expected. U.S. gas futures remained on track for their most volatile year ever.

Both implied and historic volatility were expected to hit record highs in 2022 as soaring global gas prices this year feed demand for U.S. liquefied natural gas (LNG) exports due to supply disruptions and sanctions linked to Russia's war in Ukraine.

Traders said the biggest uncertainty for the market remains when Freeport LNG will restart its LNG export plant in Texas.

Gas started to flow to Freeport on Tuesday for the first time since August, according to data provider Refinitiv. Traders said Freeport is likely using the gas to fuel a power plant at the site, but it could also be a sign that the facility is getting closer to restarting.

After several delays - from October to November to December - the company has said several times this month that the plant is on track to restart by the end of the year. Many analysts, however, do not expect Freeport to return until the first quarter of 2023 because the company still has a lot of work to do to satisfy federal regulators before the plant is ready to restart. Whenever Freeport returns, U.S. demand for gas will jump.

The plant can turn about 2.1 billion cubic feet per day (bcfd) of gas into LNG for export, which is about 2% of U.S. daily production. Freeport shut on June 8 after a pipe failure caused an explosion due to inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired to review the incident and suggest action. A couple of vessels - Prism Diversity and Prism Courage - have been waiting in the Gulf of Mexico to pick up LNG from Freeport since at least early November. Several other ships were also sailing toward the plant, including Elisa Larus, which is expected to arrive in late December, Point Fortin and Prism Agility (early January), Kmarin Diamond (mid-January) and Wilforce (late-January).

Even without Freeport, the amount of gas flowing to U.S. LNG export plants hit 13.0 bcfd last week, the most since May 29 - 10 days before Freeport shut.

That is because the nation's six other big export plants were operating near full capacity. In other LNG news, New England is set to get another load of much-needed LNG for the winter heating season in coming days.

In what has already been an extremely volatile couple of weeks for the front-month, gas futures for January delivery were down 49.5 cents, or 8.5%, to $5.356 per million British thermal units (mmBtu) at 10:27 a.m. EST (1527 GMT), putting the contract on track for its lowest close since Oct. 27.

Gas futures have climbed or dropped more than 5% every day since Dec. 12, rising as much as 8% on Dec. 15 and falling as much as 11% on Dec. 19. The premium of futures for March over April 2023 , meanwhile, fell to their lowest since March 2021, a sign the market is starting to give up on extreme cold this winter. The industry uses the March-April spread to bet on the winter heating season when demand for gas peaks. The industry calls the March-April spread the "widow-maker" because rapid price moves resulting from changing weather forecasts have knocked some speculators betting on the spread out of business, including the Amaranth hedge fund, which lost more than $6 billion on gas futures in 2006. Week ended Week ended Year ago Five-year Dec 16 Dec 9 Dec 16 average (Forecast) (Actual) Dec 16 U.S. weekly natgas storage change (bcf): -89 -50 -60 -124 U.S. total natgas in storage (bcf): 3,323 3,412 3,370 3,303 U.S. total storage versus 5-year average +0.6% -0.4% Global Gas Benchmark Futures ($ per mmBtu) This Month Prior Year Five Year Current Day Prior Day Last Year Average Average 2021 (2017-2021) Henry Hub 3.86 3.73 2.89 5.68 5.85 Title Transfer Facility (TTF) 37.67 16.04 7.49 32.71 33.26 Japan Korea Marker (JKM) 37.84 18.00 8.95 36.49 35.58 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 443 423 354 411 426 U.S. GFS CDDs 3 2 15 5 4 U.S. GFS TDDs 446 425 369 416 430 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts Five-Year Prior Week Current Week Next Week This Week Average For Last Year Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 96.3 89.8 99.8 98.7 99.2 U.S. Imports from Canada 9.2 8.9 9.1 9.3 9.7 U.S. LNG Imports 0.0 0.3 0.0 0.0 0.0 Total U.S. Supply 105.5 99.0 108.9 108.0 108.8

 

[Tom Nolan + 2,441]

https://finance.yahoo.com/news/u-power-natgas-prices-soar-133429796.html

Dec 22 (Reuters) - U.S. power and natural gas prices in the Midwest and on the West Coast soared to multiyear highs as extreme cold and snow blankets much of the country, freezing oil and gas wells and causing pipeline constraints that limit the flow of gas into California. Gas output was on track to drop about 4.7 billion cubic feet per day (bcfd) over the past three days to a preliminary seven-month low of 94.3 bcfd on Thursday as freezing weather covers much of the country, causing wells to freeze in Texas, Oklahoma, North Dakota, Pennsylvania and elsewhere. That would be the biggest daily drop in output since the February freeze of 2021 when Winter Storm Uri cut gas supplies from Texas and forced the Texas electric grid operator to impose rolling power outages. One billion cubic feet is enough gas to supply about five million U.S. homes for a day. In Northern California, next-day gas prices for Thursday at the PG&E Citygate jumped to a record high of $56 per million British thermal units (mmBtu), topping the prior all-time high of $53 in December 2000, according to data from Refinitiv. Gas at the Southern California (SoCal) Border rose to $48 per mmBtu, its highest since hitting a 22-month high of $50 last week. SoCal prices hit a record $136 during the February Freeze of 2021. That puts PG&E gas on track to average $9.21 per mmBtu in 2022, which would be its highest since hitting an annual record $8.62 in 2008, according to Refinitiv data going back to 2000. SoCal Border, meanwhile, is on track to average $8.95 per mmBtu in 2022, which would top its current annual record of $6.29 in 2021. In Chicago, next-day gas for Thursday jumped 248% to $18.76 per mmBtu, its highest since the February freeze of 2021, while gas in Texas at the Waha hub in the Permian Shale soared 87% to a three-month high of $7.35. Next-day power for Thursday jumped to $560 per megawatt hour (MWh) at the Mid Columbia (Mid C) Hub in Washington State and $475.00 in SP-15 in Southern California, their highest since September, according to data from the Refinitiv. In September, daily prices at the Mid C hit a record of $1,040 per MWh, while SP-15 hit $550, its second highest ever. SP-15 hit a daily record of $698 per MWh in August 2020 when an extreme heat wave forced California's power grid operator to impose rolling outages. That puts Mid C on track to average $91.58 per MWh in 2022, which would top its current annual record of $64.94 in 2008, according to data from the Intercontinental Exchange. SP-15 , meanwhile, is on track to average $88.15 per MWh this year, which would be its highest since hitting an annual record of $124.94 in 2001, according to ICE data going back to 2001. Hub Unit State/Region 2022 2021 Five-Year Year-To-D Average (2017-2021) ate Average Average Power Mid C $/MWh Washington 93.86 61.04 37.35 SP-15 $/MWh Southern California 85.56 56.15 44.41 Gas SoCal Border $/mmBtu Southern California 8.95 6.29 4.43 PG&E Citygate $/mmBtu Northern California 9.21 5.02 3.62 Chicago $/mmBtu Northern Illinois 6.14 4.29 2.90 Waha $/mmBtu West Texas 5.46 5.22 2.43 (Reporting by Scott DiSavino; Editing by Kirsten Donovan)

[Tom Nolan + 2,441]

https://finance.yahoo.com/news/1-u-natgas-futures-ease-153203385.html

REUTERS - Thu, December 22, 2022 at 1:30 PM CST

UPDATE 2-U.S. natgas drops 6% to 2-month low on less cold, small storage draw

(Adds latest prices) Dec 22 (Reuters) - U.S. natural gas futures dropped about 6% to a two-month low on Thursday on forecasts for warmer weather in late December and early January than previously expected and a smaller-than-expected storage draw last week.

Futures dropped despite forecasts for extreme cold over the next week that have boosted spot power and gas prices to their highest levels in years across parts of the country and put gas output on track to drop to a seven-month low due to freezing oil and gas wells in Texas, Oklahoma, North Dakota, Pennsylvania and elsewhere. Gas output was down about 4.7 billion cubic feet per day (bcfd) over the past three days to a preliminary seven-month low of 94.3 bcfd on Thursday. That would be the biggest drop in daily output since the February freeze of 2021 when a winter storm froze gas supplies in Texas and forced that state's electric grid operator to impose rolling power outages.

The futures price decline also occurred after a federal report showed last week's storage withdrawal was smaller than expected because mild weather kept heating demand low and lots of wind power reduced the amount of gas generators needed to burn to produce electricity.

The U.S. Energy Information Administration (EIA) said utilities pulled 87 billion cubic feet (bcf) of gas from storage during the week ended Dec. 16. That was less than the 93-bcf decline analysts forecast in a Reuters poll and compares with a decrease of 60 bcf in the same week last year and a five-year (2017-2021) average decline of 124 bcf.

Last week's decrease cut stockpiles to 3.325 trillion cubic feet (tcf), or 0.7% over the five-year average of 3.303 tcf for this time of year. That is the first time the amount of gas in storage was higher than the five-year average since mid-January.

After weeks of extreme volatility, front-month gas futures fell 33.3 cents, or 6.2%, to settle at $4.999 per million British thermal units (mmBtu). That was the contract's lowest close since it settled at a seven-month low of $4.959 on Oct. 21.

Traders said the biggest uncertainty for the market remains when Freeport LNG will restart its LNG export plant in Texas. Small amounts of gas started to flow to the Freeport plant this week for the first time since August, according to data provider Refinitiv, prompting some in the market to wonder whether the facility was close to restarting. A source familiar with the matter said Freeport was using the gas to maintain a flare system. After several delays - from October to November to December - the company has said several times this month that the plant is on track to restart by the end of the year, pending regulatory approval. Many analysts, however, do not expect the plant to return until the first quarter because the company still has a lot of work to do to satisfy federal regulators. Whenever the plant returns, U.S. demand for gas will jump. It can turn about 2.1 bcfd of gas into LNG for export, which is about 2% of U.S. daily production. The Freeport plant shut on June 8 after a pipe failure caused an explosion due to inadequate operating and testing procedures, human error and fatigue, according to a report by consultants hired to review the incident and suggest action. A couple of vessels - Prism Diversity and Prism Courage - have been waiting in the Gulf of Mexico to pick up LNG from Freeport since at least early November. Several other ships were also sailing toward the plant, including Elisa Larus, which is expected to arrive in late December, Prism Agility (early January), Kmarin Diamond (mid January) and Wilforce (late January). Week ended Week ended Year ago Five-year Dec 16 Dec 9 Dec 16 average (Actual) (Actual) Dec 16 U.S. weekly natgas storage change (bcf): -87 -50 -60 -124 U.S. total natgas in storage (bcf): 3,325 3,412 3,370 3,303 U.S. total storage versus 5-year average +0.7% -0.4% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2021 (2017-2021) Henry Hub 5.40 5.33 3.86 3.73 2.89 Title Transfer Facility (TTF) 29.48 30.30 37.67 16.04 7.49 Japan Korea Marker (JKM) 31.68 34.92 37.84 18.00 8.95 Refinitiv Heating (HDD),