US natgas prices log weekly decline on milder weather, storage surplus (updated)
08/03/2024 20:29
(Adds comments, updates prices)
March 8 (Reuters) - U.S. natural gas futures fell on Friday, en route to a weekly decline, as warmer-than-normal weather
slowed heating demand for the fuel while inventories stayed high.
Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange settled 1.3 cents lower at $1.805 per
million British thermal units (mmBtu).
During the session, prices touched their lowest in more than a week. They were down about 1.5% for the week.
"The market's outlook is bearish in the near-term, with mild weather that has been in the background for a few months and
withdrawals dropping below the seasonal levels," said Thomas Saal, senior vice president for energy at StoneX Financial.
"The market's focus will be on storage injections and summer. If we get a warm spring, then it will be friendly for the
market, which could drive prices above the $2 mark."
The U.S. Energy Information Administration (EIA) on Thursday 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. EIA/GAS
Friday's price declines came despite a drop in output over the past month after gas prices collapsed to a 3-1/2-year low in
February.
Financial firm LSEG said gas output in the Lower 48 fell to an average of 100.2 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.
The market retreated some this week, suggesting serious doubt about whether the curtailment would be enough to offset the
demand softness, said Zhen Zhu, managing consultant at C.H. Guernsey and Company in Oklahoma City.
"In my opinion, more cut will be needed to stop prices from sliding further as there is just not enough demand, unless we
see some signs of early and hot summer."
Traders noted the output drop showed that several energy firms, including Chesapeake Energy CHK.O , soon to become the
biggest U.S. gas producer after its merger with Southwestern Energy SWN.N , were following through on plans to cut gas drilling
this year.
On Monday, EQT EQT.N , currently the biggest U.S. gas producer, said that it would curtail nearly 1 bcfd of production
through March.
Earlier this week, BofA Research lowered its 2024 U.S. Henry Hub forecast to $2.40 and highlighted that production is
responding to weak prices, and prices must stay low in first half of this year to keep supply depressed and curb inventory builds.
U.S. energy firms this week cut the number of oil and natural gas rigs operating for the first time in three weeks, energy
services firm Baker Hughes BKR.O said in its closely followed report.
Week ended Week ended Year ago Five-year
Mar 8 March 1 Mar 8 average
forecast Actual Mar 8
U.S. weekly natgas storage change (bcf): -14 -40 -65 -87
U.S. total natgas in storage (bcf): 2,320 2,334 1,989 1,696
U.S. total storage versus 5-year average 36.8% 30.9%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2023 (2018-2022)
Henry Hub NGc1 1.79 1.82 2.41 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 8.55 8.38 13.72 13.04 14.39
Japan Korea Marker (JKM) JKMc1 8.40 8.40 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 244 234 320 279 286
U.S. GFS CDDs 13 12 12 16 12
U.S. GFS TDDs 267 246 332 295 300
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 102.3 100.2 100.0 101.8 95.1
U.S. Imports from Canada 8.3 7.3 8.1 8.6 8.4
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 110.6 107.5 108.1 110.4 103.6
U.S. Demand (bcfd)
U.S. Exports to Canada 3.6 3.7 3.8 3.1 3.0
U.S. Exports to Mexico 7.7 6.5 6.4 5.6 5.4
U.S. LNG Exports 14.0 13.4 13.6 13.1 9.2
U.S. Commercial 12.9 10.5 10.8 12.7 12.3
U.S. Residential 20.0 15.8 16.1 20.2 19.4
U.S. Power Plant 30.2 31.0 30.4 30.9 23.8
U.S. Industrial 24.5 23.5 23.8 23.6 26.8
U.S. Plant Fuel 5.1 5.0 4.9 5.0 5.0
U.S. Pipe Distribution 2.5 2.3 2.4 2.3 2.3
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 95.2 88.1 88.5 94.8 89.7
Total U.S. Demand 120.5 111.7 112.3 116.6 107.3
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 16 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 39 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 NG-W-HH-SNL 1.56 1.67
Transco Z6 New York NG-CG-NY-SNL 1.47 1.55
PG&E Citygate NG-CG-PGE-SNL 2.84 3.01
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.38 1.47
Chicago Citygate NG-CG-CH-SNL 1.51 1.58
Algonquin Citygate NG-CG-BS-SNL 1.57 1.85
SoCal Citygate NG-SCL-CGT-SNL 2.30 2.51
Waha Hub NG-WAH-WTX-SNL 0.58 0.79
AECO NG-ASH-ALB-SNL 1.76 1.40
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 24.25 28.50
PJM West EL-PK-PJMW-SNL 20.50 26.00
Ercot North EL-PK-ERTN-SNL 17.00 18.25
Mid C EL-PK-MIDC-SNL 43.36 67.00
Palo Verde EL-PK-PLVD-SNL 5.50 25.00
SP-15 EL-PK-SP15-SNL 5.76 7.25
(Reporting by Daksh Grover, Ashitha Shivaprasad, and Rahul Paswan in Bengaluru; Editing by Kirsten Donovan and David Gregorio)
((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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