US natgas futures settle lower as investors book profits after rally (updated)
22/02/2024 16:43
(Adds latest prices)
Feb 22 (Reuters) -
U.S. natural gas futures fell 2.3% on Thursday as investors booked profits following a rally in the previous session spurred
by Chesapeake Energy's decision to cut its planned output for 2024.
Front-month gas futures NGc1 fell 4.1 cents to settle at $1.732 per million British thermal units. At the session low,
prices were down almost 5%.
On Wednesday, prices posted their biggest daily percentage gain since July 2022 after Chesapeake Energy CHK.O - soon to be
the biggest U.S. gas producer after its merger with Southwestern Energy SWN.N - cut the amount it plans to produce in 2024 by
roughly 30% in response to a plunge in gas prices to a 3-1/2-year low.
"After the rally, the market is bound to pull back as the reality hasn't changed, which is that the market is in an
oversupply. We might see a pattern of consolidation here between technical support and bearish fundamentals for at least the next
few weeks," said Robert DiDona of Energy Ventures Analysis.
"It is hard to argue for any type of market tightness here in the short term. If more producers don't quite grow production or
spend CapEx or not make investments and we get some summer demand then prices could move above $2 mark, but market could see lower
curves if we get a mild summer and see no more production cuts."
The U.S. Energy Information Administration (EIA) said utilities pulled a smaller-than-expected 60 billion cubic feet (bcf) of
gas out of storage during the week ended Feb. 16. That was lower than the 65-bcf withdrawal analysts forecast in a Reuters poll
and compared with a withdrawal of 75 bcf during the same week a year ago and a five-year (2019-2023) average decrease of 168 bcf
for this time of year. EIA/GAS
Gas prices have fallen more than 30% so far this year because a mild winter kept heating demand low, allowing stockpiles to
remain at well above normal levels, while output remained near record levels despite an Arctic freeze in January that briefly cut
output and caused gas demand to soar to a record high.
Last week, U.S. energy firms Antero Resources AR.N and Comstock Resources CRK.N said they planned to reduce drilling this
year, while EQT EQT.N , currently the nation's biggest gas producer, reduced its 2024 production guidance range.
For nearly a year, U.S. natural gas producers have cut production as prices fall, but relentless output gains, including from
oil companies that pump gas as an oil byproduct, have unleashed record supplies.
U.S. liquefied natural gas (LNG) company Cheniere Energy LNG.N posted a 38.5% fall in its full-year LNG revenue on Thursday,
hit by the fall in natgas prices.
U.S. Energy Secretary Jennifer Granholm said on Wednesday the government's pause on approvals of exports of LNG will not
affect relationships with allies that import the fuel. Last month, President Joe Biden paused pending approvals of exports from
new LNG projects, a move cheered by climate activists that could delay decisions on new plants.
"The U.S. LNG sector is projected to see substantial demand growth, from 13 Bcf/d in 2023 to nearly 25 Bcf/d by 2028, driven
by projects already authorized. Key facilities like the Golden Pass and Plaquemines LNG are on track to start commissioning in
2024, promising increased demand," said Gelber & Associates in a note dated Wednesday.
"That said, the pause has led to delays in FIDs (Final Investment Decisions) for new projects in both the U.S. and Mexico and
raised uncertainties about the U.S.'s role as an LNG exporter in the longer term," the note added.
Meanwhile, Tellurian, the developer of the Driftwood LNG project, has reached an agreement with an unnamed institutional
investor to pledge its interest in the Driftwood project as collateral for the money it owes the investor, according to the
company's latest SEC filing.
Week ended Week ended Year ago Five-year
Feb 16 Feb 9 Feb 16 average
Actual Actual Feb 16
U.S. weekly natgas storage change (bcf): -60 -49 -75 -168
U.S. total natgas in storage (bcf): 2,470 2,530 2,205 2,019
U.S. total storage versus 5-year average 22.3%
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 NGc1 1.73 1.73 2.44 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 7.52 7.50 16.52 13.04 14.39
Japan Korea Marker (JKM) JKMc1 8.29 8.37 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 30-Year
Norm Norm
U.S. GFS HDDs 265 276
U.S. GFS CDDs 6 5
U.S. GFS TDDs 271 281
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 105.9 104.9 104.9 101.3 92.4
U.S. Imports from Canada 8.8 8.9 8.7 8.7 9.1
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2
Total U.S. Supply 114.7 113.9 113.6 110.0 101.7
U.S. Demand (bcfd)
U.S. Exports to Canada 3.5 3.5 3.5 2.6 2.7
U.S. Exports to Mexico 6.5 6.2 6.5 5.8 5.2
U.S. LNG Exports 13.9 13.5 13.3 12.8 8.4
U.S. Commercial 13.7 14.7 12.4 14.1 16.3
U.S. Residential 22.1 23.7 19.1 22.6 27.6
U.S. Power Plant 32.3 35.0 32.3 30.3 29.3
U.S. Industrial 24.5 24.9 24.0 24.1 25.4
U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.3
U.S. Pipe Distribution 2.7 2.8 2.5 2.7 2.7
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 100.7 106.5 95.7 99.1 106.7
Total U.S. Demand 124.6 129.7 119.0 120.3 123.0
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 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 Week ended Week ended Week ended Week ended
Feb 23 Feb 16 Feb 9 Feb 2 Jan 26
Wind 12 11 14 9 7
Solar 4 4 3 3 2
Hydro 7 7 7 7 6
Other 1 1 1 2 2
Petroleum 0 0 0 0 0
Natural Gas 42 41 38 40 43
Coal 15 16 16 18 22
Nuclear 20 21 21 20 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 1.58 1.50
Transco Z6 New York NG-CG-NY-SNL 1.44 1.56
PG&E Citygate NG-CG-PGE-SNL 2.92 2.89
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.23 1.37
Chicago Citygate NG-CG-CH-SNL 1.54 1.40
Algonquin Citygate NG-CG-BS-SNL 2.07 2.66
SoCal Citygate NG-SCL-CGT-SNL 2.65 2.60
Waha Hub NG-WAH-WTX-SNL 0.95 0.39
AECO NG-ASH-ALB-SNL 1.69 1.15
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 33.00 43.50
PJM West EL-PK-PJMW-SNL 26.50 24.00
Ercot North EL-PK-ERTN-SNL 14.75 10.00
Mid C EL-PK-MIDC-SNL 46.15 68.25
Palo Verde EL-PK-PLVD-SNL 30.50 26.25
SP-15 EL-PK-SP15-SNL 26.25 25.00
(Reporting by Ashitha Shivaprasad and Anjana Anil in Bengaluru, additional reporting by Rahul Paswan; editing by Barbara Lewis,
Kirsten Donovan)
((Ashitha.Shivaprasad@thomsonreuters.com;))
((For gas data on LSEG's Eikon type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.
For Interactive Map, type 'Interactive Map' in the box at upper left of the Eikon terminal
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SNL U.S. gas prices, see: 0#SNL-NG
For next-day SNL U.S. power prices, see: 0#SNL-PWR
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/
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
For the U.S. natural gas speed guide, see: USGAS
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 ))
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