US natgas futures slip to 30-month low on milder weather forecasts
March 28 (Reuters) - U.S. natural gas futures eased about 1% on Tuesday, putting the front-month on track to
close at a 30-month low, on rising output and mild weather forecasts that should allow utilities to start injecting
gas into storage at the beginning of April.
That small price decline came despite a forecast rise in gas demand with the amount of feedgas flowing to
liquefied natural gas (LNG) export plants on track to hit a monthly record high in March after Freeport LNG's export
plant in Texas exited an eight-month outage in February. Freeport LNG shut in June 2022 due to a fire.
On their second to last day as the front-month, gas futures for April delivery fell 3 cents, or 1.4%, to
$2.058 per million British thermal units (mmBtu) at 8:15 a.m. EDT (1215 GMT), putting the contract on track for
their lowest close since September 2020.
Futures for May, which will soon be the front-month, were trading down about 3 cents to $2.19 per mmBtu.
The market has been extremely volatile this month, with the front-month gaining or losing more than 5% on nine
of the past 19 trading days. So far this year, gas prices were down about 53%.
Freeport LNG's export plant was on track to pull in about 1.6 billion cubic feet per day (bcfd) of gas on
Tuesday, up from 1.2 bcfd on Monday, 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 said Freeport LNG had canceled some cargoes for March due to issues with one of
three liquefaction trains, and noted the facility 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 big U.S. LNG export plants rose to an average of 13.1 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 from 98.1 bcfd
in February. The monthly record is 99.9 bcfd in November 2022.
Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through April 12.
With warmer spring-like weather expected to reduce the amount of gas burned to heat homes and businesses,
Refinitiv forecast U.S. gas demand, including exports, would drop from 110.3 bcfd this week to 103.9 bcfd next week.
Those forecasts, however, were higher than Refinitiv's outlook on Monday as LNG exports rise.
Mild winter weather allowed utilities to leave more gas in storage so far this year and should let them 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 2.06 2.09 4.98 6.54 3.60
Title Transfer Facility (TTF) 13.32 13.13 41.81 40.50 14.39
Japan Korea Marker (JKM) 12.53 12.70 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 212 216 235 211 207
U.S. GFS CDDs 29 28 25 25 22
U.S. GFS TDDs 241 244 260 236 229
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 98.9 99.1 94.6 89.4
U.S. Imports from Canada 7.8 7.1 7.9 9.7 8.6
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 106.2 106.1 106.9 104.3 99.1
U.S. Demand (bcfd)
U.S. Exports to Canada 2.8 2.8 2.8 3.2 3.0
U.S. Exports to Mexico 4.8 5.1 5.1 5.4 5.2
U.S. LNG Exports 13.0 13.0 13.5 12.9 7.4
U.S. Commercial 13.1 11.5 9.8 12.1 12.4
U.S. Residential 20.6 17.7 14.3 18.1 19.6
U.S. Power Plant 29.0 29.9 29.1 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 89.4 82.4 86.4 88.9
Total U.S. Demand 114.3 110.3 103.9 107.9 104.5
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 7 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 20 18 19 20 20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 2.04 2.04
Transco Z6 New York 1.96 1.92
PG&E Citygate 6.87 6.72
Eastern Gas (old Dominion South) 1.80 1.69
Chicago Citygate 2.19 2.13
Algonquin Citygate 2.19 1.95
SoCal Citygate 9.50 9.50
Waha Hub 1.21 0.63
AECO 1.96 2.01
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 33.50 35.00
PJM West 30.25 23.50
Ercot North 28.75 29.75
Mid C 86.20 105.00
Palo Verde 57.00 35.50
SP-15 55.50 32.25
(Reporting by Scott DiSavino
Editing by Bernadette Baum)
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