By Scott DiSavino
(Reuters) – U.S. natural gas futures fell about 3% on Thursday on forecasts for milder weather and less demand next week than previously expected, which should keep the amount of gas utilities need to pull from storage low in coming weeks.
Front-month gas futures for April delivery on the New York Mercantile Exchange fell 10.6 cents, or 2.5%, to $4.141 per million British thermal units (mmBtu) by 9:07 a.m. EDT (1307 GMT). On Wednesday, the contract closed at its highest since March 11.
The price decline came ahead of a federal storage report expected to show utilities pulled less gas out of storage than usual during mild weather last week.
Analysts projected utilities pulled 3 billion cubic feet (bcf) of gas out of storage during the week ended March 14.
That compares with an increase of 5 bcf during the same week last year and a five-year average draw of 31 bcf for this time of year. [EIA/GAS] [NGAS/POLL]
Gas stockpiles, however, were still around 11% below normal levels for this time of year after extreme cold weather in January and February forced energy firms to pull large amounts of gas out of storage, including record amounts in January.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.8 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.
On a daily basis, however, output over the past three days was on track to drop by around 2.4 bcfd to a preliminary three-week low of 104.4 bcfd on Thursday.
Traders said the daily drop was likely related to spring pipeline maintenance in Texas and other states, which helped cause spot prices at the Waha Hub in West Texas to turn negative in recent days. The traders noted that preliminary output data is often updated later in the day.
Meteorologists projected weather in the Lower 48 states would remain mostly near normal through April 4.
LSEG forecast average gas demand in the Lower 48, including exports, will rise from 106.8 bcfd this week to 107.9 bcfd next week. The forecast for next week was lower than LSEG’s outlook on Wednesday.
The amount of gas flowing to the eight big operating U.S. LNG export plants rose to an average of 15.7 bcfd so far in March, up from a record 15.6 bcfd in February, as new units at Venture Global’s 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana enter service.
The U.S. became the world’s biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.
Gas was trading around $14 per mmBtu at both the Dutch Title Transfer Facility (TTF) benchmark in Europe and the Japan Korea Marker (JKM) benchmark in Asia. [NG/EU]
Week ended Week ended Year ago Five-year
Mar 14 Mar 7 Mar 14 average
Forecast Actual Mar 14
U.S. weekly natgas storage change (bcf): -3 -62 +5 -31
U.S. total natgas in storage (bcf): 1,695 1,698 2,331 1,897
U.S. total storage versus 5-year average -10.6% -11.9%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2024 (2019-2023)
Henry Hub 4.18 4.25 1.75 2.41 3.52
Title Transfer Facility (TTF) 13.67 13.97 8.54 10.95 15.47
Japan Korea Marker (JKM) 13.78 13.11 8.95 11.89 15.23
LSEG 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 231 235 255 246 240
U.S. GFS CDDs 25 21 10 20 18
U.S. GFS TDDs 256 256 265 266 258
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2020-2024)
Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 105.7 105.7 105.5 101.6 97.5
U.S. Imports from Canada 9.1 8.8 9.1 N/A 7.8
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 114.7 114.5 114.6 N/A 105.4
U.S. Demand (bcfd)
U.S. Exports to Canada 3.8 4.0 4.0 N/A 3.3
U.S. Exports to Mexico 6.2 5.8 6.2 N/A 5.4
U.S. LNG Exports 15.5 16.0 15.8 13.1 11.8
U.S. Commercial 11.2 10.3 10.8 11.9 11.8
U.S. Residential 17.2 15.6 15.8 17.7 18.3
U.S. Power Plant 25.9 24.1 23.9 30.8 27.5
U.S. Industrial 23.7 23.5 23.8 24.5 23.8
U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.2
U.S. Pipe Distribution 2.3 2.2 2.2 2.5 3.3
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.2
Total U.S. Consumption 85.6 81.0 81.9 92.7 90.1
Total U.S. Demand 111.1 106.8 107.9 N/A 110.6
N/A is Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam 2025 2025 2024 2023 2022
(Fiscal year ending Sep 30) Current Day Prior Day % of Normal % of Normal % of Normal
% of Normal % of Normal Actual Actual Actual
Forecast Forecast
Apr-Sep 92 93 74 83 107
Jan-Jul 89 89 76 77 102
Oct-Sep 90 90 77 76 103
U.S. weekly power generation percent by fuel – EIA
Week ended Week ended 2024 2023 2022
Mar 21 Mar 14
Wind 18 15 11 10 11
Solar 6 7 5 4 3
Hydro 7 7 6 6 6
Other 1 1 1 2 2
Petroleum 0 0 0 0 0
Natural Gas 33 34 42 41 38
Coal 14 16 16 17 21
Nuclear 20 20 19 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 4.21 4.17
Transco Z6 New York 3.34 3.10
PG&E Citygate 3.86 3.83
Eastern Gas (old Dominion South) 3.33 3.05
Chicago Citygate 3.69 3.34
Algonquin Citygate 3.54 3.38
SoCal Citygate 3.88 3.82
Waha Hub 0.77 0.08
AECO 1.46 1.45
ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 45.92 38.50
PJM West 50.42 46.58
Mid C 33.77 56.78
Palo Verde 11.16 18.00
SP-15 1.42 11.01
(Reporting by Scott DiSavino; Editing by Kirsten Donovan)
Comments