US natgas prices climb 2% on decline in daily output, record LNG flows

By Scott DiSavino

(Reuters) -U.S. natural gas futures climbed about 2% on Thursday on a decline in daily output, record flows to liquefied natural gas (LNG) export plants and forecasts for more demand this week than previously expected.

On its last day as the front-month, gas futures for April delivery on the New York Mercantile Exchange rose 8.9 cents, or 2.3%, to settle at $3.950 per million British thermal units (mmBtu).

Futures for May, which will soon be the front-month, were trading up about 1.5% to around $3.93 per mmBtu.

Prices rose despite a report showing last week's storage build was bigger than expected and forecasts for lower demand next week than previously expected.

The U.S. Energy Information Administration (EIA) said energy firms added 37 billion cubic feet (bcf) of gas out of storage during the week ended March 21.

That was bigger than the 25-bcf build analysts forecast in a Reuters poll and compares with a decrease of 30 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]

Some analysts said gas stockpiles were on track to increase in March for the first time since 2012 and only the second time in history.

Gas stockpiles, however, were still about 7% below normal levels for this time of year after extremely cold weather in January and February forced energy firms to pull large amounts of gas out of storage, including record amounts in January. [EIA/GAS] [NGAS/POLL]

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 106.0 billion cubic feet per day so far in March from a record 105.1 bcfd in February.

On a daily basis, however, output was on track to drop 2.3 bcfd over the past three days to a preliminary one-month low of 104.9 bcfd on Thursday. Traders noted preliminary data was often changed later in the day.

Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through April 11.

With seasonally milder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 108.8 bcfd this week to 103.3 bcfd next week. The forecast for this week was higher than LSEG's outlook on Wednesday, while the forecast for next week was lower.

Gas flowing to the eight big operating U.S. LNG export plants rose to an average of 15.8 bcfd so far in March, from a record 15.6 bcfd in February, as new units at Venture Global's 3.2-bcfd Plaquemines LNG plant under construction in Louisiana entered 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 traded around $13 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 21 Mar 14 Mar 21 average  

Actual Actual Mar 21

U.S. weekly natgas storage change (bcf): +37 +9 -30 -31  

U.S. total natgas in storage (bcf): 1,744 1,707 2,301 1,866  

U.S. total storage versus 5-year average -6.5% -10.0%      

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 3.79 3.86 1.75 2.41 3.52

Title Transfer Facility (TTF) 13.12 12.86 8.54 10.95 15.47

Japan Korea Marker (JKM) 13.20 13.15 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 181 180 233 219 211

U.S. GFS CDDs 34 39 31 23 21

U.S. GFS TDDs 215 219 264 242 232

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 106.1 106.3 106.2 101.6 97.5

U.S. Imports from Canada 8.8 8.8 8.4 N/A 7.8

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 114.8 115.0 114.6 N/A 105.4

U.S. Demand (bcfd)          

U.S. Exports to Canada 4.0 3.4 3.4 N/A 3.3

U.S. Exports to Mexico 6.0 6.3 6.2 N/A 5.4

U.S. LNG Exports 16.0 16.1 15.9 12.9 11.8

U.S. Commercial 10.4 10.5 9.2 11.3 11.8

U.S. Residential 15.7 15.2 13.2 16.9 18.3

U.S. Power Plant 24.1 26.1 24.7 28.6 27.5

U.S. Industrial 23.5 23.7 23.2 24.3 23.8

U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.2

U.S. Pipe Distribution 2.2 2.2 2.1 2.2 3.3

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.2

Total U.S. Consumption 81.2 83.1 77.8 88.6 90.1

Total U.S. Demand 107.1 108.8 103.3 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  97 98 74 83 107

Jan-Jul 95 96 76 77 102

Oct-Sep 94 94 77 76 103

U.S. weekly power generation percent by fuel - EIA          

  Week ended Week ended 2024 2023 2022

Mar 21 Mar 14

Wind 14 18 11 10 11

Solar 8 7 5 4 3

Hydro 7 7 6 6 6

Other 1 1 1 2 2

Petroleum 0 0 0 0 0

Natural Gas 35 32 42 41 38

Coal 16 14 16 17 21

Nuclear 19 20 19 19 19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)          

Hub Current Day Prior Day      

Henry Hub 3.84 3.94      

Transco Z6 New York  3.14 3.39      

PG&E Citygate  2.34 2.83      

Eastern Gas (old Dominion South)  3.09 3.29      

Chicago Citygate  3.27 3.43      

Algonquin Citygate  3.51 3.88      

SoCal Citygate  2.51 2.70      

Waha Hub  0.47 -0.12      

AECO 2.04 2.06      

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)          

Hub Current Day Prior Day      

New England 40.67 47.00      

PJM West 49.92 55.73      

Mid C 13.13 24.03      

Palo Verde 16.00  13.50      

SP-15 4.52 6.01      

(Reporting by Scott DiSavino, Editing by Nick Zieminski and Richard Chang)