S&P GSCI NATURAL GAS INDEX
By Scott DiSavino
April 4 (Reuters) - U.S. natural gas futures slid about 2% to a one-week low on Thursday on forecasts for milder weather
over the next two weeks than previously expected, a smaller output decline so far this month and ample amounts of gas in storage.
The price decline came despite a federal report showing an expected bigger-than-usual storage withdrawal last week when
cooler-than-normal weather boosted heating demand for the fuel, and bullish forecasts for more demand over the next two weeks than
previously expected as the amount of gas flowing to liquefied natural gas (LNG) export plants increases.
The U.S. Energy Information Administration (EIA) said utilities pulled 37 billion cubic feet (bcf) of gas from storage
during the week ended March 29.
That was in line with the 38-bcf withdrawal analysts forecast in a Reuters poll and compares with a decrease of 29 bcf in the
same week last year and a five-year (2019-2023) average decline of 1 bcf for this time of year.
Last week's withdrawal left gas stockpiles about 39% above normal levels for this time of year.
Front-month gas futures for May delivery on the New York Mercantile Exchange fell 2.7 cents, or 1.5%, to $1.814 per
million British thermal units (mmBtu) at 10:34 a.m. EDT (1434 GMT), putting the contract on track for its lowest close since March
28.
In other news, about 627,000 homes and businesses were still without power on Thursday - mostly in Maine and New Hampshire
- due to storms over the past few days, according to PowerOutage.us. That was up from around 449,000 without service earlier on
Thursday.
Power outages usually reduce demand for gas - at least temporarily - since generators don't have to burn as much of the
fuel to produce electricity.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 98.9 billion cubic feet per day (bcfd)
so far in April, down from 100.8 bcfd in March. That compares with a monthly record high of 105.6 bcfd in December 2023.
As more data became available, LSEG reduced the estimated output decline so far in April from a preliminary 4.1 bcfd on
Tuesday to 2.6 bcfd on Wednesday and 2.3 bcfd on Thursday.
Meteorologists projected weather across the Lower 48 would remain cooler than normal through April 7 before turning warmer
than normal from April 8-19.
With seasonally warmer weather coming, LSEG forecast gas demand in the Lower 48, including exports, would fall from 104.4 bcfd
this week to 103.2 bcfd next week. Those forecasts were higher than LSEG's outlook on Wednesday.
Gas flows to the seven big U.S. LNG export plants fell to an average of 12.4 bcfd so far in April, down from 13.1 bcfd in
March. That compares with a monthly record of 14.7 bcfd in December.
On a daily basis, LNG feedgas was on track to rise from a 10-week low of 11.3 bcfd on Tuesday to around 13.0 bcfd on Wednesday
and Thursday as flows increase to Cheniere Energy's Sabine Pass in Louisiana and Corpus Christi in Texas. Flows to
Freeport LNG's export plant in Texas, however, remained reduced.
Analysts do not expect U.S. LNG feedgas to return to record levels until all three liquefaction trains at Freeport return to
service.
Freeport has said it expects Trains 1 and 2 to remain shut until May for inspections and repairs, while Train 3 was operating.
Each Freeport train can turn about 0.7 bcfd of gas into LNG.
Week ended Week ended Year ago Five-year
Mar 29 Mar 22 Mar 29 average
Actual Actual Mar 29
U.S. weekly natgas storage change (bcf): -37 -36 -29 -1
U.S. total natgas in storage (bcf): 2,259 2,296 1,837 1,626
U.S. total storage versus 5-year average 38.9% 41.1%
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 1.83 1.84 2.20 2.66 3.60
Title Transfer Facility (TTF) 8.17 8.19 13.49 13.04 14.39
Japan Korea Marker (JKM) 9.50 9.47 12.34 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 153 164 146 192 176
U.S. GFS CDDs 29 23 34 28 28
U.S. GFS TDDs 182 187 180 220 204
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 100.5 99.6 99.4 101.5 95.0
U.S. Imports from Canada 7.7 7.4 7.0 7.4 7.8
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.0
Total U.S. Supply 108.2 107.0 106.5 108.9 102.8
U.S. Demand (bcfd)
U.S. Exports to Canada 3.4 2.9 2.4 2.0 2.4
U.S. Exports to Mexico 6.2 6.5 6.3 5.9 5.4
U.S. LNG Exports 12.9 12.5 13.1 13.9 10.1
U.S. Commercial 11.7 9.6 9.1 9.3 8.4
U.S. Residential 17.5 13.9 13.1 13.5 11.8
U.S. Power Plant 29.3 28.2 28.6 28.9 22.7
U.S. Industrial 24.5 23.5 23.4 21.9 25.9
U.S. Plant Fuel 5.0 4.9 4.9 4.9 5.0
U.S. Pipe Distribution 2.4 2.2 2.2 2.2 2.3
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 90.5 82.5 81.4 80.8 76.2
Total U.S. Demand 113.0 104.4 103.2 102.6 94.1
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 82 83 107 81
Jan-Jul 82 83 77 102 79
Oct-Sep 82 83 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Apr 5 Mar 29 Mar 22 Mar 15 Mar 8
Wind 16 16 13 15 15
Solar 5 5 5 5 4
Hydro 7 8 8 8 7
Other 1 1 1 1 1
Petroleum 0 0 0 0 0
Natural Gas 38 38 40 38 39
Coal 12 13 13 12 13
Nuclear 21 19 20 21 21
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 1.86 1.65
Transco Z6 New York 1.71 1.83
PG&E Citygate 2.51 2.36
Eastern Gas (old Dominion South) 1.62 1.58
Chicago Citygate 1.84 1.72
Algonquin Citygate 2.05 2.05
SoCal Citygate 2.14 1.97
Waha Hub 1.45 0.48
AECO 1.25 1.19
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 37.25 34.50
PJM West 32.50 32.50
Ercot North 18.75 33.00
Mid C 52.00 33.00
Palo Verde 2.25 -3.75
SP-15 -0.75 -7.50
(Reporting by Scott DiSavino)
US natgas prices slip 2% to 1-week low on milder forecasts
April 04, 2024 at 10:31 am EDT
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