US natgas prices slide 2% on lower demand forecasts, extended Freeport LNG outage (updated)
20/03/2024 19:21
(Adds latest prices)
By Scott DiSavino
March 20 (Reuters) - U.S. natural gas futures slid about 3% on Wednesday on forecasts for less demand over the next two
weeks than previously expected and news of a demand-destroying, extended outage of two liquefaction trains at Freeport LNG's
export plant in Texas.
Freeport LNG said it anticipates two of the three liquefaction trains at its liquefied natural gas (LNG) plant will remain out
of service for testing and repairs through May.
Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange fell 4.5 cents, or 2.6%, to settle at
$1.699 per million British thermal units (mmBtu). On Tuesday, the contract closed at its highest since March 11.
Energy traders said futures were supported earlier in the week by a continued drop in U.S. output after gas prices collapsed
to a 3-1/2-year low in February.
Prices fell as low as $1.511 per mmBtu on Feb. 27, their lowest since June 2020, as near-record output, mostly mild weather
and low heating demand this winter allowed utilities to leave significantly more gas in storage than usual for this time of year.
Analysts estimated current gas stockpiles were around 41% above normal levels. EIA/GAS NGAS/POLL
Those low prices were expected to boost U.S. gas use to a record high in 2024, but will cut production for the first time
since 2020 when the COVID-19 pandemic destroyed demand for the fuel, according to the U.S. Energy Information Administration's
latest outlook.
Output was already down by around 5% over the past month as several energy firms, including EQT EQT.N and Chesapeake Energy
CHK.O , delay well completions and cut back on other drilling activities.
EQT is currently the biggest U.S. gas producer and Chesapeake will soon become the biggest producer after its merger with
Southwestern Energy SWN.N .
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the lower 48 U.S. states had fallen to an average of 100.3 billion cubic feet per day
(bcfd) so far in March, down from 104.1 bcfd in February. That compares with a monthly record high of 105.5 bcfd in December 2023.
Meteorologists projected weather across the Lower 48 states would remain mostly colder than normal through March 24 before
turning to near normal from March 25-April 4.
LSEG forecast gas demand in the lower 48 states, including exports, would remain around 114.0 bcfd this week and next. Those
forecasts were lower than LSEG's outlook on Tuesday.
Gas flows to the seven big U.S. LNG export plants have fallen to an average of 13.3 bcfd so far in March, down from 13.7 bcfd
in February. That compares with a monthly record of 14.7 bcfd in December.
Analysts do not expect U.S. LNG feedgas to return to record levels until all three liquefaction trains at Freeport return to
full service.
Freeport said Train 1 will be taken down immediately, Train 2 is offline and Train 3 is operating. Train 3 shut in January
during a brutal freeze that damaged one of its motors.
LSEG said the amount of gas flowing to Freeport was on track to rise to 0.9 bcfd on Wednesday from 0.3 bcfd on Tuesday. Each
liquefaction train at Freeport can turn about 0.7 bcfd of gas into LNG.
Week ended Week ended Year ago Five-year
Mar 15 Mar 8 Mar 15 average
Forecast Actual Mar 15
U.S. weekly natgas storage change (bcf): +4 -9 -68 -42
U.S. total natgas in storage (bcf): 2,329 2,325 1,921 1,654
U.S. total storage versus 5-year average 40.8% 37.1%
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 NGc1 1.73 1.74 2.41 2.66 3.60
Title Transfer Facility (TTF) TRNLTTFMc1 9.04 9.28 13.72 13.04 14.39
Japan Korea Marker (JKM) JKMc1 9.90 8.88 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 255 260 280 246 236
U.S. GFS CDDs 10 10 19 21 18
U.S. GFS TDDs 265 270 299 267 254
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 100.4 100.0 100.0 101.9 95.1
U.S. Imports from Canada 7.6 7.4 8.0 8.6 8.4
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 108.0 107.5 107.9 110.5 103.6
U.S. Demand (bcfd)
U.S. Exports to Canada 3.7 3.7 3.7 2.8 3.0
U.S. Exports to Mexico 6.5 5.6 6.2 5.2 5.4
U.S. LNG Exports 13.2 13.1 13.4 13.0 9.2
U.S. Commercial 10.4 11.5 11.5 13.1 12.3
U.S. Residential 15.2 17.0 17.3 20.6 19.4
U.S. Power Plant 29.1 31.2 30.2 29.0 23.8
U.S. Industrial 23.6 24.4 24.2 23.6 26.8
U.S. Plant Fuel 5.0 4.9 4.9 5.0 5.0
U.S. Pipe Distribution 2.3 2.4 2.4 2.3 2.3
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 85.8 91.6 90.7 93.7 89.7
Total U.S. Demand 109.1 114.0 114.0 114.7 107.3
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 84 84 83 107 81
Jan-Jul 83 83 77 102 79
Oct-Sep 84 85 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Mar 22 Mar 15 Mar 8 Mar 1 Feb 23
Wind 14 15 15 14 13
Solar 5 5 4 4 4
Hydro 8 8 7 7 7
Other 1 1 1 1 1
Petroleum 0 0 0 0 0
Natural Gas 40 38 39 38 40
Coal 12 12 13 16 15
Nuclear 21 21 21 21 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub NG-W-HH-SNL 1.55 1.54
Transco Z6 New York NG-CG-NY-SNL 1.54 1.46
PG&E Citygate NG-CG-PGE-SNL 2.29 2.37
Eastern Gas (old Dominion South) NG-PCN-APP-SNL 1.48 1.40
Chicago Citygate NG-CG-CH-SNL 1.55 1.48
Algonquin Citygate NG-CG-BS-SNL 1.67 1.62
SoCal Citygate NG-SCL-CGT-SNL 1.57 1.63
Waha Hub NG-WAH-WTX-SNL 1.43 0.14
AECO NG-ASH-ALB-SNL 1.31 1.26
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England EL-PK-NPMS-SNL 23.75 24.00
PJM West EL-PK-PJMW-SNL 31.00 28.50
Ercot North EL-PK-ERTN-SNL 22.00 23.88
Mid C EL-PK-MIDC-SNL 23.64 33.00
Palo Verde EL-PK-PLVD-SNL 2.50 15.50
SP-15 EL-PK-SP15-SNL 1.50 12.00
(Reporting by Scott DiSavino
Editing by Marguerita Choy and Mark Potter)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))
((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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