S&P GSCI NATURAL GAS INDEX
By Scott DiSavino
March 28 (Reuters) - U.S. natural gas futures edged up about 1% to a one-week high on Thursday on forecasts for higher
demand over the next two weeks than previously expected and a slightly bigger-than-expected weekly storage withdrawal.
That price increase also came ahead of the upcoming Good Friday holiday when demand should decline as many businesses and
government offices shut for a long weekend.
Prices were up despite forecasts for mild weather through mid April, ample amounts of gas in storage and reduced amounts
of gas flowing to liquefied natural gas (LNG) export plants due to ongoing repairs at Freeport LNG's export plant in Texas.
The U.S. Energy Information Administration (EIA) said utilities pulled 36 billion cubic feet (bcf) of gas from storage during
the week ended March 22.
That was a little higher than the 28-bcf withdrawal analysts forecast in a Reuters poll and compares with a decrease of 55 bcf
in the same week last year and a five-year (2019-2023) average decline of 27 bcf for this time of year.
Front-month gas futures for May delivery on the New York Mercantile Exchange rose 1.9 cents, or 1.1%, to $1.737 per
million British thermal units (mmBtu) at 10:36 a.m. EDT (1436 GMT), putting the contract on track for its highest close since
March 19.
Gas prices have been depressed for months - falling to an intraday low of $1.481 per mmBtu on March 26, their lowest since
June 2020 - after a mild winter with record output allowed utilities to leave significantly more gas in storage than usual for
this time of year.
Gas stockpiles were about 41% above normal levels for this time of year.
Low prices should boost U.S. gas use to a record high in 2024 and cut production for the first time since 2020 when the
COVID-19 pandemic destroyed demand for the fuel, according to the U.S. Energy Information Administration's latest outlook.
Output was already down by around 3% over the past month as several energy firms, including EQT and Chesapeake Energy
, delayed well completions and cut back on other drilling activities.
In the spot market, mild weather and ample hydro and other renewable power supplies in the U.S. West cut electric prices in
California and Arizona to record lows this week.
Next-day power fell to 50 cents per megawatt hour (MWh) at South Path-15 (SP-15) in Southern California and
negative $9 at the Palo Verde hub in Arizona, according to data from SNL Energy on the LSEG terminal.
The compares with prior all-time lows of $1.50 per MWh in SP-15 on March 19 and a negative $8 at Palo Verde on March 26.
Negative prices mean there is too much power in a region due to low demand and/or transmission constraints, and are used to
encourage power generators to shut plants or pay to keep them running.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 100.2 billion cubic feet per day (bcfd)
so far in March, down from 104.1 bcfd in February. That compares with a monthly record high of 105.5 bcfd in December 2023.
Meteorologists projected weather across the Lower 48 would remain mostly warmer than normal through April 12.
With seasonally warmer weather coming, LSEG forecast gas demand in the Lower 48, including exports, would fall from 113.4 bcfd
this week to 106.2 bcfd next week. Those forecasts were lower than LSEG's outlook on Wednesday.
Gas flows to the seven big U.S. LNG export plants fell to an average of 13.2 bcfd so far in March, down from 13.7 bcfd in
February. That compares with a monthly record of 14.7 bcfd in December.
Week ended Week ended Year ago Five-year
Mar 22 Mar 15 Mar 15 average
Actual Actual Mar 15
U.S. weekly natgas storage change (bcf): -36 +7 -55 -27
U.S. total natgas in storage (bcf): 2,296 2,332 1,866 1,627
U.S. total storage versus 5-year average 41.1% 41.0%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2023 (2018-2022)
Henry Hub 1.69 1.72 2.41 2.66 3.60
Title Transfer Facility (TTF) 8.57 8.76 13.72 13.04 14.39
Japan Korea Marker (JKM) 9.40 9.58 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 30-Year
Norm Norm
U.S. GFS HDDs 177 188 229 219 203
U.S. GFS CDDs 18 17 29 24 23
U.S. GFS TDDs 205 205 258 243 229
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 100.2 99.6 99.4 102.3 95.1
U.S. Imports from Canada 7.5 7.7 7.9 7.8 8.4
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 107.7 107.3 107.3 110.1 103.6
U.S. Demand (bcfd)
U.S. Exports to Canada 3.7 3.4 3.4 2.8 3.0
U.S. Exports to Mexico 6.0 6.0 6.3 5.6 5.4
U.S. LNG Exports 13.0 12.9 13.1 13.1 9.2
U.S. Commercial 11.5 11.8 9.7 11.5 12.3
U.S. Residential 16.9 17.7 13.9 17.7 19.4
U.S. Power Plant 30.5 29.7 29.1 29.8 23.8
U.S. Industrial 24.4 24.4 23.5 23.8 26.8
U.S. Plant Fuel 4.9 4.9 4.9 4.9 5.0
U.S. Pipe Distribution 2.4 2.4 2.2 2.4 2.3
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 90.8 91.1 83.5 90.2 89.7
Total U.S. Demand 113.5 113.4 106.2 111.7 107.3
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 80 83 107 81
Jan-Jul 82 81 77 102 79
Oct-Sep 82 82 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Mar 29 Mar 22 Mar 15 Mar 8 Mar 1
Wind 18 13 15 15 14
Solar 5 5 5 4 4
Hydro 7 8 8 7 7
Other 1 1 1 1 1
Petroleum 0 0 0 0 0
Natural Gas 37 40 38 39 38
Coal 13 13 12 13 16
Nuclear 20 20 21 21 21
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 1.43 1.48
Transco Z6 New York 1.32 1.44
PG&E Citygate 2.29 2.36
Eastern Gas (old Dominion South) 1.26 1.37
Chicago Citygate 1.32 1.44
Algonquin Citygate 1.52 1.58
SoCal Citygate 1.59 1.58
Waha Hub 0.29 0.38
AECO 1.18 1.22
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 31.50 31.50
PJM West 29.50 31.00
Ercot North 20.00 19.00
Mid C 26.25 29.50
Palo Verde -9.00 -8.00
SP-15 0.50 3.75
(Reporting by Scott DiSavino, Editing by Nick Zieminski and Andrea Ricci)
US natgas prices edge up 1% to 1-week high on higher demand forecasts
March 28, 2024 at 10:31 am EDT
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