US natgas futures up 3% on forecasts for colder weather
March 24 (Reuters) -U.S. natural gas futures gained about 3% on Friday after falling to a one-month low in the prior session on forecasts confirming the weather will remain mostly colder than normal for the next two weeks, keeping heating demand higher than usual through early April.
That price increase also came on expectations the amount of gas flowing to liquefied natural gas (LNG) export plants would hit a record high during the month of March after Freeport LNG's export plant in Texas exited an eight-month outage in February. It shut in a fire in June 2022.
Front-month gas futures NGc1 for April delivery rose 6 cents, or 2.8%, to $2.214 per million British thermal units (mmBtu) at 7:59 a.m. EDT (1159 GMT). On Thursday, the contract closed at its lowest since Feb. 21 when it settled at a 29-month low of $2.073.
For the week, the front-month was down about 5%, putting it down for a third week in a row for the first time since early February.
Freeport LNG's export plant was on track to pull in about 1.6 billion cubic feet per day (bcfd) of gas on Friday, up from 1.5 bcfd on Thursday, according to Refinitiv data. Freeport LNG said on March 8 that it anticipated feedgas flows would rise and fall as the plant returns to full production over the "next few weeks."
Sources familiar with the plant, however, said Freeport LNG was canceling some cargoes due to issues with one of the plant's three liquefaction trains and could take longer than the company expects to return to full service. Liquefaction trains turn gas into LNG for export.
When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export.
Total gas flows to all seven of the big U.S. LNG export plants rose to an average of 13.1 bcfd so far in March from 12.8 bcfd in February. That would top the monthly record of 12.9 bcfd in March 2022, before the Freeport LNG facility shut.
The seven big U.S. LNG export plants, including Freeport LNG, can turn about 13.8 bcfd of gas into LNG.
SUPPLY AND DEMAND
Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.4 bcfd so far in March, from 98.1 bcfd in February. That compares with a monthly record of 99.9 bcfd in November 2022.
Analysts said production declined earlier this year due in part to gas price falls of 40% in January and 35% in December that persuaded several energy firms to reduce the number of rigs they were using to drill for gas.
In addition, extreme cold in early February and late December cut gas output as some oil and gas wells in several producing basins froze.
Meteorologists projected the weather in the Lower 48 states would remain mostly colder-than-normal through April 8.
But with a seasonal warming of the weather with the coming of spring, Refinitiv forecast U.S. gas demand, including exports, would slide from 114.4 bcfd this week to 108.6 bcfd next week and 107.0 bcfd in two weeks. The forecast for this week was lower than Refinitiv's outlook on Thursday.
Milder winter weather so far this year has prompted utilities to leave more gas in storage than usual.
Gas stockpiles were about 23% above their five-year average (2018-2022) during the week ended March 17 and were expected to end about 20% above normal during the colder-than-normal week ended March 24, according to federal data and analysts' estimates. EIA/GAS NGAS/POLL
Week ended Mar 24 (Forecast)
Week ended Mar 17 (Actual)
Year ago Mar 24
Five-year average Mar 24
U.S. weekly natgas storage change (bcf):
U.S. total natgas in storage (bcf):
U.S. total storage versus 5-year average
Global Gas Benchmark Futures ($ per mmBtu)
This Month Last Year
Prior Year Average 2022
Five Year Average (2018-2022)
Henry Hub NGc1
Title Transfer Facility (TTF) TRNLTTFMc1
Japan Korea Marker (JKM) JKMc1
Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast
U.S. GFS HDDs
U.S. GFS CDDs
U.S. GFS TDDs
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
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Five-Year Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production
U.S. Imports from Canada
U.S. LNG Imports
Total U.S. Supply
U.S. Demand (bcfd)
U.S. Exports to Canada
U.S. Exports to Mexico
U.S. LNG Exports
U.S. Power Plant
U.S. Plant Fuel
U.S. Pipe Distribution
U.S. Vehicle Fuel
Total U.S. Consumption
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U.S. weekly power generation percent by fuel - EIA
Week ended Mar 24
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SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Henry Hub NG-W-HH-SNL
Transco Z6 New York NG-CG-NY-SNL
PG&E Citygate NG-CG-PGE-SNL
Eastern Gas (old Dominion South) NG-PCN-APP-SNL
Chicago Citygate NG-CG-CH-SNL
Algonquin Citygate NG-CG-BS-SNL
SoCal Citygate NG-SCL-CGT-SNL
Waha Hub NG-WAH-WTX-SNL
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
New England EL-PK-NPMS-SNL
PJM West EL-PK-PJMW-SNL
Ercot North EL-PK-ERTN-SNL
Mid C EL-PK-MIDC-SNL
Palo Verde EL-PK-PLVD-SNL
Reporting by Scott DiSavino; Editing by Chizu Nomiyama
For Refinitiv type ENERGY in Eikon search bar and then go to the GAS drop down and the NORTH AMERICA drop down or see: cpurl://apps.cp./cms/?pageid=usa-gas
For Interactive Map, type 'Interactive Map' in the box at upper left of the Reuters nEiko terminal.
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SNL U.S. gas prices, see: 0#SNL-NG
For next-day SNL U.S. power prices, see: 0#SNL-PWR
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/
For U.S. Northwest hydro power report, see: NWRFC
For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
For the U.S. natural gas speed guide, see: USGAS
For the U.S. power speed guide, see: USPOWER
To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)
NYMEX Henry Hub options and futures combined 0#3CFTC023651
NYMEX Henry Hub futures only 0#1CFTC023651
ICE Henry Hub options and futures combined 0#3CFTC023391
NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B
NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C
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