US natural gas futures dip, retreat from nearly 3-year high on oversupply concerns (updated)

US Global Investors

02/12/2025 20:36

Natural gas futures dip on record output, ample storage

Prices gained 17.6% in November due to strong demand

Cold weather still key driver of prices despite supply glut

Adds latest prices

By Noel John

Dec 2 (Reuters) - U.S. natural gas futures fell on Tuesday, retreating from early gains as worries about abundant supplies outweighed forecasts for colder weather and stronger demand.

Front-month gas futures for January delivery NGc1 on the New York Mercantile Exchange fell 8.1 cents, or 1.6%, to settle at $4.84 per million British thermal units (mmBtu). During the session, they hit their highest level since December 2022.

"The market may be at least supply-wise saturated, so you got a little bit of a pullback here. But we'll see if this cold weather continues," said Thomas Saal, senior vice president for energy trading at StoneX Financial.

Prices were pressured due to record output, ample amounts of gas in storage and lower gas prices around the world due mostly to the Ukraine peace talks.

Despite ample supply, strong demand helped U.S. natural gas prices to gain 17.6% in November.

"Weather remains as the primary price driver and while current cold temperatures are expected to begin moderating next week, trends across the northeast quadrant are expected to remain below normal when looking out beyond the middle of this month," consultancy Ritterbusch & Associates said in a note.

SUPPLY AND DEMAND

LSEG said average gas output in the Lower 48 states rose to a record 109.6 billion cubic feet per day (bcfd) in November from 107.0 bcfd in October and the prior all-time monthly high of 108.0 bcfd in August.

Record output this year has allowed energy companies to stockpile more gas than usual, leaving about 5% more gas in storage than normal for this time of year. EIA/GAS NGAS/POLL

LSEG projected average gas demand in the Lower 48 states, including exports, would fall slightly from 142.0 bcfd this week to 140.5 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.

Average gas flows to the eight big LNG export plants operating in the U.S. rose to a record 18.3 bcfd in November, topping the prior all-time monthly high of 16.6 bcfd in October.

Europe's benchmark gas contract extended a nine-day losing streak on plentiful liquefied natural gas (LNG) supply and muted demand from warmer-than-normal weather, curbing risks typically associated with the winter heating season. NG/EU

Elsewhere, Ukraine's state oil and gas firm Naftogaz said that Russian forces had attacked its gas production and storage facilities late on Monday and early on Tuesday.

Week ended Nov 21 Actual
Week ended Nov 14 Actual
Year ago Nov 21
Five-year average Nov 21
U.S. weekly natgas storage change (bcf):
-11
-14
-2
-25
U.S. total natgas in storage (bcf):
3,935
3,946
3,967
3,775
U.S. total storage versus 5-year average
+4.2%
+3.8%
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
4.94
4.78
2.98
2.41
3.52
Title Transfer Facility (TTF) TRNLTTFMc1
9.54
9.54
13.89
10.95
15.47
Japan-Korea Marker (JKM) JKMc1
11.07
11.09
14.12
11.89
15.23
LSEG U.S. Global Forecast System (GFS) Heating, Cooling and Total Degree Days
Two-Week Total Forecast
Current Day
Prior Day
Prior Year
10-Year Norm
30-Year Norm
U.S. GFS Heating Degree Days (HDD)
405
436
356
342
372
U.S. GFS Cooling Degree Days (CDD)
4
5
4
5
4
U.S. GFS Total Degree Days (TDD)
409
441
360
347
376
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
110.5
110.7
110.5
103.6
99.2
U.S. Imports from Canada
8.8
9.6
9.2
N/A
8.1
U.S. LNG Imports
0.0
0.0
0.0
0.0
0.0
Total U.S. Supply
119.2
120.4
119.7
N/A
107.3
U.S. Demand (bcfd)
U.S. Exports to Canada
3.2
3.0
3.0
N/A
2.9
U.S. Exports to Mexico
6.1
6.2
6.1
N/A
5.7
U.S. LNG Export Feedgas
18.6
18.8
18.4
13.9
12.2
U.S. Commercial
12.1
17.4
17.3
13.1
11.0
U.S. Residential
18.9
29.3
28.9
20.7
15.7
U.S. Power Plant
31.4
32.9
32.4
30.9
30.0
U.S. Industrial
24.3
26.1
25.9
24.6
24.2
U.S. Plant Fuel
5.5
5.5
5.5
5.4
5.3
U.S. Pipe Distribution
2.5
3.0
3.0
2.4
3.3
U.S. Vehicle Fuel
0.1
0.1
0.1
0.1
0.2
Total U.S. Consumption
94.8
114.3
113.0
97.2
89.7
Total U.S. Demand
122.7
142.2
140.5
N/A
110.5
N/A = Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)
2026 Current Day % of Normal Forecast
2026 Prior Day % of Normal Forecast
2025 % of Normal Actual
2024
% of Normal Actual
2023
% of Normal Actual
Apr-Sep
91
88
76
74
83
Jan-Jul
90
84
78
76
77
Oct-Sep
91
86
80
77
76
U.S. weekly power generation percent by fuel - EIA
Week ended Nov 28
Week ended Nov 21
2024
2023
2022
Wind
11
11
11
10
11
Solar
5
5
5
4
3
Hydro
5
5
6
6
6
Other
1
1
1
2
2
Petroleum
0
0
0
0
0
Natural Gas
39
40
42
41
38
Coal
18
17
16
17
21
Nuclear
21
20
19
19
19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub
Current Day
Prior Day
This Month Last Year
Prior Year Average 2024
Five-Year Average (2019-2023)
Henry Hub NG-W-HH-SNL
5.08
4.59
2.10
2.19
3.49
Transco Z6 New York NG-CG-NY-SNL
5.23
4.11
1.99
1.98
3.29
PG&E Citygate NG-CG-PGE-SNL
4.75
4.34
3.29
3.04
5.47
Eastern Gas (old Dominion South) NG-PCN-APP-SNL
4.33
3.92
1.83
1.68
2.77
Chicago Citygate NG-CG-CH-SNL
4.45
4.30
1.98
2.00
3.41
Algonquin Citygate NG-CG-BS-SNL
13
7.70
2.70
2.88
4.27
SoCal Citygate NG-SCL-CGT-SNL
4.95
4.63
2.55
2.47
5.92
Waha Hub NG-WAH-WTX-SNL
1.50
1.28
0.33
0.77
2.91
AECO NG-ASH-ALB-SNL
3.05
2.14
0.98
0.96
2.28
ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
Prior Day
This Month Last Year
Prior Year Average 2024
Five-Year Average (2019-2023)
New England E-NEPLMHP-IDX
124.28
78.88
44.71
47.35
48.44
PJM West E-PJWHRTP-IX
83
72.25
35.99
41.98
45.33
Mid C W-MIDCP-IDX
46.96
51.75
37.13
63.89
61.73
Palo Verde W-PVP-IDX
36
32.33
29.23
39.50
62.42
SP-15 W-SP15-IDX
46.66
34.83
30.01
31.30
58.87

 (Reporting by Noel John in Bengaluru; additional reporting by Anushree Mukherjee, Editing by Paul Simao and David Gregorio)

 ((Noel.John@thomsonreuters.com;))