US natgas prices drop 6% to one-week low on small storage withdrawal, mild weather
Adds latest prices
By Scott DiSavino
March 7 (Reuters) -U.S. natural gas futures dropped about 6% to a one-week low onThursday on an expected much smaller-than-usual storage withdrawal last week when warmer-than-normal weather kept heating demand low.
Traders also noted prices were down as the amount of gas flowing to liquefied natural gas (LNG) export plants remained low due to an ongoing outage at Freeport LNG's plant in Texas.
That price decline came despite a drop in output over the past month aftergas prices collapsed to a 3-1/2-year low in Februaryand forecasts for cooler weather and more heating demand over the next two weeks than previously expected.
Even though the forecasts called for a little more cool in coming weeks, meteorologists forecast the weather across the Lower 48 U.S. states would still remain mostly warmer than normal through at least March 18.
The U.S. Energy Information Administration (EIA) said utilities pulled 40 billion cubic feet (bcf) of gas out of storage during the week ended March 1.
That was in line with the 40-bcf withdrawal that analysts forecast in a Reuters poll and compares with a decrease of 72 bcf in the same week last year and a five-year (2019-2023) average decline of 93 bcf for this time of year. EIA/GAS NGAS/POLL
That decrease left gas stockpiles about 31% above normal levels for this time of year. Analysts projected that storage surplus would grow in coming weeks as mild weather keeps heating demand low.
"Many analysts are projecting another small withdrawal next week, with some models even reflecting an (unusual) injection into working gas stocks rather than a withdrawal," analysts at energy consulting firm Gelber and Associates said in a note.
Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange fell 11.1 cents, or 5.8%, to settle at $1.818 per million British thermal units (mmBtu), their lowest close since Feb. 27.
Prices collapsed to an intraday low of $1.511 per mmBtu on Feb. 27, their lowest since June 2020, as near-record output, mostly mild weather and low heating demand this winter allowed utilities to leave significantly more gas in storage than usual for this time of year.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 fell to an average of 100.1 billion cubic feet per day (bcfd) so far in March, down from 104.1 bcfd in February. That compares with a monthly record of 105.5 bcfd in December 2023.
On a daily basis, output was on track to drop by around 4.8 bcfd over the last month to a preliminary seven-week low of 99.0 bcfd. That would be the lowest daily production since early February 2023, excluding the massive 17.3-bcfd drop in mid-January due to freezing wells.
Traders said the output drop showed that several energy firms, including Chesapeake Energy CHK.O, soon to become the biggest U.S. gas producer after its merger with Southwestern Energy SWN.N, were following through on plans to cut gas drilling this year.
EQT EQT.N, currently the biggest U.S. gas producer, said on Monday that it would curtail nearly 1 bcfd of production through March.
With seasonally warmer weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would ease from 111.6 bcfd this week to 110.9 bcfd next week. Those forecasts were higher than LSEG's outlook on Wednesday.
Gas flows to the seven big U.S. LNG export plants slid to an average of 13.4 bcfd so far in March, down from 13.7 bcfd in February. That compares with a monthly record of 14.7 bcfd in December.
Week ended Mar 1 Actual | Week ended Feb 23 Actual | Year ago Mar 1 | Five-year average Mar 1 | ||
U.S. weekly natgas storage change (bcf): | -40 | -96 | -72 | -93 | |
U.S. total natgas in storage (bcf): | 2,334 | 2,374 | 2,054 | 1,783 | |
U.S. total storage versus 5-year average | 30.9% | 26.5% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five Year Average (2018-2022) |
Henry Hub NGc1 | 1.94 | 1.93 | 2.41 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 8.53 | 8.37 | 13.72 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 8.42 | 8.38 | 13.59 | 14.39 | 14.31 |
LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days | |||||
Two-Week Total Forecast | Current Day | Prior Day | Prior Year | 10-Year Norm | 30-Year Norm |
U.S. GFS HDDs | 234 | 229 | 324 | 306 | 291 |
U.S. GFS CDDs | 12 | 12 | 13 | 13 | 12 |
U.S. GFS TDDs | 246 | 241 | 337 | 319 | 303 |
LSEG U.S. Weekly GFS Supply and Demand Forecasts | |||||
Prior Week | Current Week | Next Week | This Week Last Year | Five-Year (2019-2023) Average For Month | |
U.S. Supply (bcfd) | |||||
U.S. Lower 48 Dry Production | 102.3 | 100.1 | 100.2 | 101.8 | 95.1 |
U.S. Imports from Canada | 8.3 | 7.3 | 8.3 | 8.6 | 8.4 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 110.6 | 107.4 | 108.4 | 110.4 | 103.6 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 3.6 | 3.7 | 3.7 | 3.1 | 3.0 |
U.S. Exports to Mexico | 7.7 | 6.5 | 6.3 | 5.6 | 5.4 |
U.S. LNG Exports | 14.0 | 13.4 | 13.6 | 13.1 | 9.2 |
U.S. Commercial | 12.9 | 10.4 | 10.7 | 12.7 | 12.3 |
U.S. Residential | 20.0 | 15.7 | 15.8 | 20.2 | 19.4 |
U.S. Power Plant | 30.2 | 30.8 | 29.6 | 30.9 | 23.8 |
U.S. Industrial | 24.5 | 23.5 | 23.8 | 23.6 | 26.8 |
U.S. Plant Fuel | 5.1 | 4.9 | 4.9 | 5.0 | 5.0 |
U.S. Pipe Distribution | 2.5 | 2.3 | 2.3 | 2.3 | 2.3 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 95.2 | 87.9 | 87.3 | 94.8 | 89.7 |
Total U.S. Demand | 120.5 | 111.6 | 110.9 | 116.6 | 107.3 |
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam | Current Day % of Normal Forecast | Prior Day % of Normal Forecast | 2023 % of Normal Actual | 2022 % of Normal Actual | 2021 % of Normal Actual |
Apr-Sep | 83 | 84 | 83 | 107 | 81 |
Jan-Jul | 83 | 84 | 77 | 102 | 79 |
Oct-Sep | 83 | 84 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Mar 8 | Week ended Mar 1 | Week ended Feb 23 | Week ended Feb 16 | Week ended Feb 9 | |
Wind | 17 | 16 | 13 | 11 | 14 |
Solar | 4 | 4 | 4 | 4 | 3 |
Hydro | 7 | 7 | 7 | 7 | 7 |
Other | 1 | 1 | 1 | 1 | 1 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 38 | 38 | 40 | 41 | 38 |
Coal | 12 | 16 | 15 | 16 | 16 |
Nuclear | 21 | 21 | 20 | 21 | 21 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 1.67 | 1.51 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.55 | 1.49 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.01 | 2.98 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.47 | 1.42 | |||
Chicago Citygate NG-CG-CH-SNL | 1.58 | 1.58 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.85 | 1.62 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.51 | 2.30 | |||
Waha Hub NG-WAH-WTX-SNL | 0.79 | 0.59 | |||
AECO NG-ASH-ALB-SNL | 1.40 | 1.36 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 28.50 | 24.75 | |||
PJM West EL-PK-PJMW-SNL | 26.00 | 26.75 | |||
Ercot North EL-PK-ERTN-SNL | 18.25 | 28.50 | |||
Mid C EL-PK-MIDC-SNL | 67.00 | 61.00 | |||
Palo Verde EL-PK-PLVD-SNL | 25.00 | 26.50 | |||
SP-15 EL-PK-SP15-SNL | 7.25 | 22.50 |
Reporting by Scott DiSavino; Editing by Jonathan Oatis and Franklin Paul
For gas data on LSEG's Eikon type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.
For Interactive Map, type 'Interactive Map' in the box at upper left of the Eikon 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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