US natgas futures drop 4% to 4-week low on milder forecasts
March 27 (Reuters) - U.S. natural gas futures fell about 4% to a four-week low on Monday on rising output
and forecasts for milder weather and lower heating demand next week than previously expected that should allow
utilities to start injecting gas into storage at the beginning of April.
That price drop came even though the amount of gas flowing to liquefied natural gas (LNG) export plants was on
track to rise to a monthly record high in March after Freeport LNG's export plant in Texas exited an eight-month
outage in February. Freeport LNG shut due to a fire in June 2022.
Front-month gas futures for April delivery fell 8.8 cents, or 4.0%, to $2.128 per million British thermal
units (mmBtu) at 8:54 a.m. EDT (1254 GMT), putting the contract on track for its lowest close since Feb. 21 when it
settled at a 29-month low of $2.073.
Even though gas prices were down about 53% so far this year, gas speculators last week cut their net short
futures and options positions on the New York Mercantile and Intercontinental Exchanges for a fourth week in a row
to their lowest since August 2022, according to the U.S. Commodity Futures Trading Commission's Commitments of
Traders report.
That was the first time speculators cut their net short positions for four consecutive weeks since April 2022.
Freeport LNG's export plant was on track to pull in about 1.5 billion cubic feet per day (bcfd) of gas on
Monday, up from 0.6 bcfd on Sunday, according to Refinitiv data. On March 8, Freeport LNG said it anticipated
feedgas flows would rise and fall as the plant returns to full production over the "next few weeks."
Sources familiar with the plant, however, said Freeport LNG had canceled some cargoes due to issues with one of
the facility's three liquefaction trains and could take longer than the company expects to return to full service.
Liquefaction trains turn gas into LNG for export.
When operating at full power, Freeport LNG can turn about 2.1 bcfd of gas into LNG for export.
Total gas flows to all seven of the big U.S. LNG export plants rose to an average of 13.0 bcfd so far in March,
up from 12.8 bcfd in February. That would top the monthly record of 12.9 bcfd in March 2022, before the Freeport LNG
facility shut.
The seven big U.S. LNG export plants, including Freeport LNG, can turn about 13.8 bcfd of gas into LNG.
SUPPLY AND DEMAND
Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.5 bcfd so far in March, up from 98.1
bcfd in February. That compares with a monthly record of 99.9 bcfd in November 2022.
Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through April 11.
With the coming of warmer spring-like weather, Refinitiv forecast U.S. gas demand, including exports, would drop
from 109.4 bcfd this week to 102.5 bcfd next week. The forecast for this week was higher than Refinitiv's outlook on
Friday, while its forecast for next week was lower.
Mild winter weather so far this year has prompted utilities to leave more gas in storage than usual and should
allow them to start injecting fuel into inventories at the beginning of April.
Gas stockpiles were about 23% above their five-year average (2018-2022) during the week ended March 17 and were
expected to end about 20% above normal during the colder-than-normal week ended March 24, according to federal data
and analysts' estimates.
Week ended Week ended Year ago Five-year
Mar 24 Mar 17 Mar 24 average
(Forecast) (Actual) Mar 24
U.S. weekly natgas storage change (bcf): -55 -72 +15 -17
U.S. total natgas in storage (bcf): 1,845 1,900 1,411 1,532
U.S. total storage versus 5-year average 20.4% 22.7%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2022 (2018-2022)
Henry Hub 2.13 2.17 4.98 6.54 3.60
Title Transfer Facility (TTF) 13.22 13.61 41.81 40.50 14.39
Japan Korea Marker (JKM) 12.70 13.34 36.96 34.11 14.31
Refinitiv 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 216 243 235 211 211
U.S. GFS CDDs 28 21 25 25 21
U.S. GFS TDDs 244 264 260 236 232
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 98.5 98.8 98.8 94.6 89.4
U.S. Imports from Canada 7.8 7.2 7.9 9.7 8.6
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 106.2 106.0 106.7 104.3 99.1
U.S. Demand (bcfd)
U.S. Exports to Canada 2.8 2.9 2.9 3.2 3.0
U.S. Exports to Mexico 4.8 5.0 5.1 5.4 5.2
U.S. LNG Exports 13.0 12.9 13.2 12.9 7.4
U.S. Commercial 13.1 11.4 9.6 12.1 12.4
U.S. Residential 20.6 17.5 14.1 18.1 19.6
U.S. Power Plant 29.0 29.6 28.4 25.0 25.7
U.S. Industrial 23.6 22.8 22.0 23.7 23.6
U.S. Plant Fuel 4.9 4.9 4.9 4.9 4.9
U.S. Pipe Distribution 2.5 2.4 2.2 2.5 2.6
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 93.7 88.7 81.4 86.4 88.9
Total U.S. Demand 114.3 109.4 102.5 107.9 104.5
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Mar 31 Mar 24 Mar 17 Mar 10 Mar 3
Wind 14 14 15 12 13
Solar 4 3 3 3 3
Hydro 6 7 7 7 7
Other 2 2 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 38 37 37 41 40
Coal 16 17 16 16 15
Nuclear 19 18 19 20 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 2.04 2.08
Transco Z6 New York 1.92 1.87
PG&E Citygate 6.72 7.85
Eastern Gas (old Dominion South) 1.69 1.78
Chicago Citygate 2.13 2.11
Algonquin Citygate 1.95 1.98
SoCal Citygate 9.50 8.55
Waha Hub 0.63 0.93
AECO 2.01 1.97
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 35.00 27.25
PJM West 23.50 25.25
Ercot North 29.75 27.00
Mid C 105.00 47.75
Palo Verde 35.50 34.25
SP-15 32.25 37.75
(Reporting by Scott DiSavino; Editing by Andrea Ricci)
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