U.S. natural gas rises over 7%, helped by cooler weather forecasts
(Reuters) - U.S. natural gas futures gained more than 7%, rebounding from a four-year low hit in the previous session, helped by forecasts for slightly cooler weather leading to increased demand for gas for heating.
Front-month gas futures for April delivery rose 7.7 cents, or 7.7%, to settle at $1.885 per MMBtu. Prices dropped to as low as $1.51 in the previous session, its weakest level since June 2020, hurt by surplus supplies.
"Today prices are all about weather's starting to get a little bit colder and production tallying off a bit," said Phil Flynn, an analyst at Price Futures Group.
"But, unless forecasts project it to be cold through March, it is not going to be enough to offset all the heating degree days that we missed."
LSEG estimated 260 heating degree days (HDDs) for the year as of Wednesday, compared with 259 HDDs on Tuesday.
LSEG said gas output in the U.S. Lower 48 states rose to an average of 105 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.
On a daily basis, however, output so far this week was at 102.4 bcf compared to 104.3 bcf last week.
Last week, prices soared about 13% after Chesapeake Energy, soon to be the biggest U.S. gas producer after its merger with Southwestern Energy, cut planned production for 2024 by roughly 30% after a recent plunge in prices.
Natural gas prices have plunged around 26% so far this year, hurt 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.
Market participants also kept tabs on a wildfire that ripped across the Texas Panhandle.
Dutch and British wholesale gas prices were steady, with ample supply despite an increased impact from a Norwegian outage.
Qatar's planned expansion of LNG production could see it control nearly 25% share of the global market by 2030 and squeeze out rival projects, including in the U.S. where President Joe Biden has paused new export approvals, market experts say.
|
Week ended Feb 23 Forecast |
Week ended Feb 16 Actual |
Year ago Feb 23 |
Five-year average Feb 23 |
||
|
U.S. weekly natgas storage change (bcf): |
-97 |
-60 |
-79 |
-143 |
|
|
U.S. total natgas in storage (bcf): |
2,373 |
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 Last Year |
Prior Year Average 2023 |
Five Year Average (2018-2022) |
|
Henry Hub <NGc1> |
1.79 |
1.55 |
2.44 |
2.66 |
3.60 |
|
Title Transfer Facility (TTF) <TRNLTTFMc1> |
8.07 |
7.35 |
16.52 |
13.04 |
14.39 |
|
Japan Korea Marker (JKM) <JKMc1> |
8.22 |
8.3 |
16.87 |
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 |
260.1 |
258.7 |
331.07 |
385.79 |
386.24 |
|
U.S. GFS CDDs |
8.5 |
9.6 |
15.09 |
7.35 |
5.71 |
|
U.S. GFS TDDs |
268.6 |
268.3 |
346.09 |
393.14 |
354 |
|
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 |
105.1 |
103 |
103 |
101.3 |
92.4 |
|
U.S. Imports from Canada |
9.0 |
8.3 |
8.7 |
8.7 |
9.1 |
|
U.S. LNG Imports |
0.0 |
0.0 |
0.0 |
0.0 |
0.2 |
|
Total U.S. Supply |
114.1 |
111.3 |
111.6 |
110.0 |
101.7 |
|
U.S. Demand (bcfd) |
|||||
|
U.S. Exports to Canada |
3.5 |
3.7 |
3.7 |
2.6 |
2.7 |
|
U.S. Exports to Mexico |
6.4 |
6.6 |
6.4 |
5.8 |
5.2 |
|
U.S. LNG Exports |
13.6 |
13.9 |
13.7 |
12.8 |
8.4 |
|
U.S. Commercial |
14.8 |
12.7 |
11.0 |
14.1 |
16.3 |
|
U.S. Residential |
23.8 |
19.6 |
17.1 |
22.6 |
27.6 |
|
U.S. Power Plant |
34.3 |
29.8 |
29.9 |
30.3 |
29.3 |
|
U.S. Industrial |
24.9 |
24.1 |
23.4 |
24.1 |
25.4 |
|
U.S. Plant Fuel |
5.2 |
5.1 |
5.1 |
5.2 |
5.3 |
|
U.S. Pipe Distribution |
2.8 |
2.5 |
2.4 |
2.7 |
2.7 |
|
U.S. Vehicle Fuel |
0.1 |
0.1 |
0.1 |
0.1 |
0.1 |
|
Total U.S. Consumption |
105.9 |
94.1 |
89.0 |
99.1 |
106.7 |
|
Total U.S. Demand |
129.4 |
118.2 |
112.8 |
120.3 |
123.0 |
|
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 |
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 March 1 |
Week ended Feb 23 |
Week ended Feb 16 |
Week ended Feb 9 |
Week ended Feb 2 |
|
|
Wind |
15 |
12 |
11 |
14 |
9 |
|
Solar |
5 |
4 |
4 |
3 |
3 |
|
Hydro |
7 |
7 |
7 |
7 |
7 |
|
Other |
1 |
1 |
1 |
1 |
2 |
|
Petroleum |
0 |
0 |
0 |
0 |
0 |
|
Natural Gas |
38 |
41 |
41 |
38 |
40 |
|
Coal |
13 |
15 |
16 |
16 |
18 |
|
Nuclear |
22 |
20 |
21 |
21 |
20 |
|
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) |
|||||
|
Hub |
Current Day |
Prior Day |
|||
|
Henry Hub <NG-W-HH-SNL> |
1.52 |
1.65 |
|||
|
Transco Z6 New York <NG-CG-NY-SNL> |
1.35 |
1.27 |
|||
|
PG&E Citygate <NG-CG-PGE-SNL> |
2.72 |
2.40 |
|||
|
Eastern Gas (old Dominion South) <NG-PCN-APP-SNL> |
1.30 |
1.18 |
|||
|
Chicago Citygate <NG-CG-CH-SNL> |
1.41 |
1.33 |
|||
|
Algonquin Citygate <NG-CG-BS-SNL> |
1.48 |
1.47 |
|||
|
SoCal Citygate <NG-SCL-CGT-SNL> |
2.31 |
2.51 |
|||
|
Waha Hub <NG-WAH-WTX-SNL> |
0.36 |
0.39 |
|||
|
AECO <NG-ASH-ALB-SNL> |
1.72 |
1.74 |
|||
|
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) |
|||||
|
Hub |
Current Day |
Prior Day |
|||
|
New England <EL-PK-NPMS-SNL> |
23.75 |
25.00 |
|||
|
PJM West <EL-PK-PJMW-SNL> |
29.75 |
22.75 |
|||
|
Ercot North <EL-PK-ERTN-SNL> |
17.50 |
16.00 |
|||
|
Mid C <EL-PK-MIDC-SNL> |
43.25 |
41.00 |
|||
|
Palo Verde <EL-PK-PLVD-SNL> |
14.36 |
13.25 |
|||
|
SP-15 <EL-PK-SP15-SNL> |
11.50 |
4.5 |
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