S&P GSCI NATURAL GAS INDEX
By Scott DiSavino
March 7 (Reuters) - U.S. natural gas futures slid about 2% on Thursday 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 after gas prices collapsed to a 3-1/2-year low over the past month and
forecasts for a little 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.
That decrease left gas stockpiles about 31% above normal levels for this time of year.
Front-month gas futures for April delivery on the New York Mercantile Exchange fell 3.8 cents, or 2.0%, to $1.891 per
million British thermal units (mmBtu) at 10:41 a.m. EST (1541 GMT).
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, soon to become the biggest
U.S. gas producer after its merger with Southwestern Energy, were following through on plans to cut gas drilling this
year.
EQT, 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.
Analysts do not expect U.S. LNG feedgas to return to record levels until Freeport LNG is back at full power, which some market
watchers say could happen in mid-March.
Week ended Week ended Year ago Five-year
Mar 1 Actual Feb 23 Mar 1 average
Actual 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 Prior Year Five Year
Last Year Average Average
2023 (2018-2022)
Henry Hub 1.94 1.93 2.41 2.66 3.60
Title Transfer Facility (TTF) 8.53 8.37 13.72 13.04 14.39
Japan Korea Marker (JKM) 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 30-Year
Norm 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 Next Week This Week Five-Year
Week Last 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 Prior Day 2023 2022 2021
% of Normal % of Normal % of Normal % of Normal % of Normal
Forecast Forecast Actual Actual 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 Week ended Week ended Week ended Week ended
Mar 8 Mar 1 Feb 23 Feb 16 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 1.67 1.51
Transco Z6 New York 1.55 1.49
PG&E Citygate 3.01 2.98
Eastern Gas (old Dominion South) 1.47 1.42
Chicago Citygate 1.58 1.58
Algonquin Citygate 1.85 1.62
SoCal Citygate 2.51 2.30
Waha Hub 0.79 0.59
AECO 1.40 1.36
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 28.50 24.75
PJM West 26.00 26.75
Ercot North 18.25 28.50
Mid C 67.00 61.00
Palo Verde 25.00 26.50
SP-15 7.25 22.50
(Editing by Jonathan Oatis and Franklin Paul)
US natgas prices slide 2% on small storage withdrawal, mild weather
March 07, 2024 at 10:32 am EST
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