US natgas prices hit fresh 26-month high on Canada tariffs worries, record LNG flows

Osaka Gas Co

05/03/2025 13:44

US gas output on track to hit record high in March

US LNG export feedgas on track to match February record high

Oil-to-gas ratio falls to lowest since December 2022

By Scott DiSavino

March 5 (Reuters) - U.S. natural gas futures edged up to a fresh 26-month high on Wednesday on record flows to liquefied natural gas export (LNG) plants and forecasts for higher demand this week than previously expected.

Traders said prices also gained support on worries gas exports from Canada to the U.S. could decline due to U.S. President Donald Trump's tariffs on Canada and Mexico that took effect on Tuesday.

Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange rose 3.3 cents, or 0.8%, to $4.383 per million British thermal units (mmBtu) at 8:22 a.m. EST (1322 GMT), putting the contract on track for its highest close since December 2022 for a second day in a row.

Prices rose despite near-record output and forecasts for less demand next week than previously expected and mild weather through late-March, which should allow utilities to pull less gas out of storage in coming weeks.

Extreme cold weather earlier this year, however, has already forced energy firms to pull massive amounts of gas out of storage, including record amounts in January, cutting stockpiles to around 12% below the five-year (2020-2024) normal. EIA/GAS NGAS/POLL

A 15% increase in gas prices so far this week coupled with a 14% drop in oil futures CLc1 over the past seven weeks cut the oil-to-gas ratio, or the level at which oil trades compared with gas, to 16 to 1, the lowest since December 2022. On an energy equivalent basis, oil should only trade six times over gas.

So far in 2025, crude prices have averaged about 20 times over gas. That compares with 33 times over gas in 2024 and 21 times over gas during the prior five years (2019-2023).

SUPPLY AND DEMAND

Average gas output in the Lower 48 U.S. states rose to 105.5 billion cubic feet per day (bcfd) so far in March, up from a record 104.7 bcfd in February, according to LSEG data.

On a daily basis, output was on track to decline by 2.2 bcfd over the past five days to a preliminary one-week low of 104.7 bcfd on Wednesday, down from a three-week high of 106.5 bcfd on February 28. That compares with an all-time daily high of 106.7 on February 6.

In the import market, the U.S. was on track to pull in around 8.2 bcfd of gas from Canada on Wednesday, down from 8.3 bcfd on Tuesday and an average of 9.8 bcfd during the 11 days (February 21-March 3)before the U.S. imposed tariffs on Canada and Mexico on March 4. That compares with an average of 8.6 bcfd of Canadian gas exports to the U.S. in 2024 and 7.6 bcfd over the prior five years (2019-2023).

Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through March 20.

With milder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 119.4 bcfd this week to 111.2 bcfd next week. The forecast for this week was higher than LSEG's outlook on Tuesday, while its forecast for next week was lower.

The amount of gas flowing to the eight big U.S. LNG export plants held at an average of 15.6 bcfd so far in March, the same as February's record high, as new units at Venture Global's VG.N 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana enter service.

Week ended Feb 28 Forecast
Week ended Feb 21 Actual
Year ago Feb 28
Five-year average
Feb 28
U.S. weekly natgas storage change (bcf):
-97
-261
-56
-94
U.S. total natgas in storage (bcf):
1,743
1,840
2,345
1,984
U.S. total storage versus 5-year average
-12.1%
-11.5%
Global Gas Benchmark Futures ($ per mmBtu)
Current Day
Prior Day
This Month Last Year
Prior Year Average 2024
Five-Year Average (2019-2023)
Henry Hub NGc1
4.30
4.35
1.75
2.41
3.52
Title Transfer Facility (TTF) TRNLTTFMc1
13.44
13.48
8.54
10.95
15.47
Japan Korea Marker (JKM) JKMc1
13.83
13.97
8.95
11.89
15.23
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
282
284
209
306
304
U.S. GFS CDDs
7
8
16
13
11
U.S. GFS TDDs
289
292
225
319
315
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week
Current Week
Next Week
This Week Last Year
Five-Year (2020-2024)Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production
104.1
105.6
105.4
101.8
97.5
U.S. Imports from Canada
9.7
9.3
9.2
N/A
7.8
U.S. LNG Imports
0.0
0.0
0.0
0.0
0.1
Total U.S. Supply
113.9
115.0
114.7
N/A
105.4
U.S. Demand (bcfd)
U.S. Exports to Canada
3.8
3.9
3.8
N/A
3.3
U.S. Exports to Mexico
6.0
5.8
5.9
N/A
5.4
U.S. LNG Exports
15.9
15.6
15.5
13.3
11.8
U.S. Commercial
14.3
13.6
11.8
10.2
11.8
U.S. Residential
23.0
21.5
18.3
15.2
18.3
U.S. Power Plant
30.9
26.7
24.5
30.3
27.5
U.S. Industrial
24.8
24.5
23.9
23.4
23.8
U.S. Plant Fuel
5.1
5.2
5.2
5.1
5.2
U.S. Pipe Distribution
2.7
2.5
2.3
2.7
3.3
U.S. Vehicle Fuel
0.1
0.1
0.1
0.1
0.2
Total U.S. Consumption
101.1
94.2
86.1
87.0
90.1
Total U.S. Demand
126.8
119.4
111.2
N/A
110.6
N/A is Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)
2025 Current Day
% of Normal Forecast
2025
Prior Day % of Normal Forecast
2024
% of Normal Actual
2023
% of Normal Actual
2022
% of Normal Actual
Apr-Sep
84
85
74
83
107
Jan-Jul
82
83
76
77
102
Oct-Sep
84
85
77
76
103
U.S. weekly power generation percent by fuel - EIA
Week ended Mar 7
Week ended Feb 28
2024
2023
2022
Wind
13
13
11
10
11
Solar
6
6
5
4
3
Hydro
7
7
6
6
6
Other
1
1
1
2
2
Petroleum
0
0
0
0
0
Natural Gas
35
35
42
41
38
Coal
16
18
16
17
21
Nuclear
20
20
19
19
19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub
Current Day
Prior Day
Henry Hub NG-W-HH-SNL
4.39
3.80
Transco Z6 New York NG-CG-NY-SNL
3.95
3.50
PG&E Citygate NG-CG-PGE-SNL
4.07
3.83
Eastern Gas (old Dominion South) NG-PCN-APP-SNL
3.83
3.33
Chicago Citygate NG-CG-CH-SNL
4.05
3.44
Algonquin Citygate NG-CG-BS-SNL
4.23
4.16
SoCal Citygate NG-SCL-CGT-SNL
4.10
3.75
Waha Hub NG-WAH-WTX-SNL
1.81
0.45
AECO NG-ASH-ALB-SNL
1.36
1.27
ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
Prior Day
New England E-NEPLMHP-IDX
52.17
60.00
PJM West E-PJWHDAP-IDX
43.78
41.02
Mid C W-MIDCP-IDX
53.92
46.32
Palo Verde W-PVP-IDX
52.13
30.30
SP-15 W-SP15-IDX
42.92
20.64


 (Reporting by Scott DiSavino; Editing by Tasim Zahid)

 ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))

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For next-day SNL U.S. gas prices, see: 0#SNL-NG

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For U.S. natgas price and storage polls, see: NGAS/POLL

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For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

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For the U.S. power speed guide, see: USPOWER

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C