Feb 29 (Reuters) -
U.S. natural gas futures eased on Thursday and were headed for a fourth straight monthly fall on plentiful supplies, although
a bigger-than-expected storage withdrawal offered prices some support for the day.
Front-month gas futures for April delivery were down 0.7% at $1.87 per million British thermal units (mmBtu) at 11:50
a.m. ET (1650 GMT). Prices briefly turned positive after the storage report.
Prices saw a 7% rise in the previous session, rebounding from its weakest level since June 2020 hit earlier in the week.
Natural gas prices are still set for a more than 10% decline this month, its fourth straight monthly decline and its longest
losing steak since March 2020, affected by a mild winter that has left stockpiles well above normal, while output remained near
record levels despite an Arctic freeze in January that briefly cut output and sent gas demand to a record high.
LSEG said gas output in the U.S. Lower 48 states rose to an average of 105 billion cubic feet per day (bcfd) so far in
February, up from 102.1 bcfd in January, but still short of the monthly record high of 106.3 bcfd in December.
The report "was definitely a little on the friendly side because it was a larger withdrawal than expected, with the market
reacting bullishly to a bullish report," said Thomas Saal, senior vice president for energy at StoneX Financial, adding that a
lack of follow-through buying and an oversupplied market countered the gains.
"How the weather behaves next few weeks, that'll be the key factor. ... If there is enough weather demand, keeping the
withdrawals up in the 90's-80's, 90s area, that could be friendly because typically in March the withdrawals start to dwindle."
The U.S. Energy Information Administration (EIA) said utilities pulled a bigger-than-expected 96 billion cubic feet (bcf) of
gas out of storage during the week ended Feb. 23. That was higher than the 88-bcf withdrawal analysts forecast in a Reuters poll.
LSEG estimated 11 cooling degree days (CDDs) for the week as of Thursday, compared with 9 CDDs on Wednesday.
"Fundamentals don't appear conducive to a price advance sustainable much beyond this week," energy advisory Ritterbusch and
Associates said in a note.
"While some supportive tweaks to the 1–2-week temperature views may have spurred some buying, this heating season is becoming
advanced enough to curtail HDD accumulation capable of driving a storage surplus of 600 bcf or more next month."
Market participants also kept a close eye on a wildfire that ripped across the Texas Panhandle. Several smaller wildfires at
various stages of containment are burning other parts of the state's northern Panhandle, whipped up by fierce winds and hot, dry
weather.
On the other hand, a third of the U.S. faced the threat of severe weather as strong winds, snow and tornadoes threatened the
Southeast, Ohio Valley and East Coast, while a fierce winter storm bore down on the Northwest.
Dutch and British wholesale gas prices were mixed, as the market approaches the last month of heating season with ample
inventories and weak demand, and amid supply concerns due to an outage at U.S. Freeport LNG.
Week ended Week ended Year ago Five-year
Feb 23 Feb 16 Feb 23 average
Actual Feb 23
Actual
U.S. weekly natgas storage change (bcf): -96 -60 -79 -143
U.S. total natgas in storage (bcf): 2,374 2,470 2,126 1,876
U.S. total storage versus 5-year average 26.5%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2023 (2018-2022)
Henry Hub 2.44 2.66 3.60
1.86 1.79
Title Transfer Facility (TTF) 16.52 13.04 14.39
7.87 8.07
Japan Korea Marker (JKM) 16.87 14.39 14.31
8.49 8.22
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 331.07 385.79 386.24
256 260
U.S. GFS CDDs 15.09 7.35 5.71
11 9
U.S. GFS TDDs 346.09 393.14 354
267 269
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2019-2023)
Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 101.3 92.4
105.1 103 102.9
U.S. Imports from Canada 8.7 9.1
9.0 8.3 8.6
U.S. LNG Imports 0.0 0.2
0.0 0.0 0.0
Total U.S. Supply 110.0 101.7
114.1 111.3 111.5
U.S. Demand (bcfd)
U.S. Exports to Canada 2.6 2.7
3.5 3.6 3.6
U.S. Exports to Mexico 5.8 5.2
6.4 6.2 6.3
U.S. LNG Exports 12.8 8.4
13.6 13.9 13.8
U.S. Commercial 14.1 16.3
14.8 12.9 10.9
U.S. Residential 22.6 27.6
23.8 19.9 17.0
U.S. Power Plant 30.3 29.3
33.4 29.8 29.4
U.S. Industrial 24.1 25.4
24.9 24.2 23.4
U.S. Plant Fuel 5.2 5.3
5.2 5.1 5.1
U.S. Pipe Distribution 2.7 2.7
2.8 2.5 2.3
U.S. Vehicle Fuel 0.1 0.1
0.1 0.1 0.1
Total U.S. Consumption 99.1 106.7
105.0 94.5 88.2
Total U.S. Demand 120.3 123.0
128.5 118.3 112.0
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021
% of Normal % of Normal % of Normal % of Normal % of Normal
Forecast Forecast Actual Actual Actual
Apr-Sep 81 79 83 107 81
Jan-Jul 83 81 77 102 79
Oct-Sep 82 81 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
March 1 Feb 23 Feb 16 Feb 9 Feb 2
Wind 12 11 14 9
16
Solar 4 4 3 3
4
Hydro 7 7 7 7
7
Other 1 1 1 2
1
Petroleum 0 0 0 0
0
Natural Gas 41 41 38 40
37
Coal 15 16 16 18
13
Nuclear 20 21 21 20
22
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub
1.61 1.52
Transco Z6 New York
1.58 1.35
PG&E Citygate
2.22 2.72
Eastern Gas (old Dominion South)
1.48 1.30
Chicago Citygate
1.52 1.41
Algonquin Citygate
2.23 1.48
SoCal Citygate
2.26 2.31
Waha Hub
0.59 0.36
AECO
1.71 1.72
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England
31.75 23.75
PJM West
31.75 29.75
Ercot North
23.25 17.50
Mid C
37.50 43.25
Palo Verde
13.50 14.36
SP-15
10.50 11.50
(Reporting by Anjana Anil and Swati Verma in Bengaluru; editing by Jonathan Oatis)
Natgas prices face 4th straight monthly decline on excess supply
February 29, 2024 at 11:59 am EST
Share
Share
