U.S. natgas futures down 4% on mild weather, small storage draw
March 30 (Reuters) - U.S. natural gas futures dropped about 4% on Thursday on rising output, milder weather
forecasts and a smaller than expected storage withdrawal.
The amount of gas flowing to liquefied natural gas (LNG) export plants was 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 and returned to near
full power this week. Freeport LNG shut last June after a fire.
The U.S. Energy Information Administration (EIA) said utilities pulled 47 billion cubic feet (bcf) of gas from
storage during the week ended March 24.
That was less than the 54-bcf withdrawal analysts forecast in a Reuters poll, and compares with an increase of
15 bcf in the same week last year and a five-year (2018-2022) average decline of 17 bcf.
On their first day as the front-month, gas futures for May delivery on the New York Mercantile Exchange
(NYMEX) fell 8.0 cents, or 3.7%, from where it traded on Wednesday to settle at $2.104 per million British thermal
units (mmBtu) on Thursday.
That was up about 6% from where the April contract closed when it was still the front-month. April futures
expired in technically oversold territory below the psychologically significant $2 per mmBtu at $1.991 on Wednesday,
which was the lowest settle for the front-month since September 2020 for a second day in a row.
The market has been extremely volatile, with the front-month gaining or losing more than 5% on 10 of the past 22
trading days. Gas prices were on track to drop about 23% for the month of March and 53% for the first quarter of
2023.
Freeport LNG's export plant was on track to pull in about 2.1 billion cubic feet per day (bcfd) of gas on
Thursday, up from 1.8 bcfd on Wednesday, according to data provider Refinitiv.
That is a sure sign Freeport LNG was back near full power since, when operating at full power, the plant 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 Freeport LNG shut.
The seven big U.S. LNG export plants can turn about 13.8 bcfd of gas into LNG.
On a daily basis, preliminary figures show feedgas flows to U.S. LNG plants were on track to hit a record high
of 14.4 bcfd on Wednesday, which would top the previous daily record of 14.2 bcfd on March 5.
LNG export plants pull in a little more gas than they can process into LNG to fuel the equipment used to
liquefy gas.
SUPPLY AND DEMAND
Refinitiv said average gas output in the U.S. Lower 48 states rose to 98.6 bcfd so far in March, up 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 13.
That mild weather should allow utilities to start injecting gas into storage at the beginning of April.
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 110.6 bcfd this week to 103.5 bcfd next week.
The forecast for next week was lower than Refinitiv's outlook on Wednesday.
Week ended Week ended Year ago Five-year
Mar 24 Mar 17 Mar 24 average
(Actual) (Actual) Mar 24
U.S. weekly natgas storage change (bcf): -47 -72 +15 -17
U.S. total natgas in storage (bcf): 1,853 1,900 1,411 1,532
U.S. total storage versus 5-year average 21.0% 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 2.16 2.18 4.98 6.54 3.60
Title Transfer Facility (TTF) 13.77 13.66 41.81 40.50 14.39
Japan Korea Marker (JKM) 12.54 12.51 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 193 206 235 211 199
U.S. GFS CDDs 30 28 25 25 23
U.S. GFS TDDs 223 234 260 236 222
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 7.0 7.5 9.7 8.6
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 106.2 105.9 106.6 104.3 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 5.0 5.4 5.2
U.S. LNG Exports 13.0 13.3 14.0 12.9 7.4
U.S. Commercial 13.1 11.5 9.4 12.1 12.4
U.S. Residential 20.6 17.7 13.7 18.1 19.6
U.S. Power Plant 29.0 30.0 29.4 25.0 25.7
U.S. Industrial 23.6 22.8 21.9 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 89.5 81.6 86.4 88.9
Total U.S. Demand 114.3 110.6 103.5 107.9 104.5
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 7 7 7 7 7
Other 2 2 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 43 37 37 41 40
Coal 17 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 1.94 2.02
Transco Z6 New York 1.93 1.97
PG&E Citygate 7.18 6.66
Eastern Gas (old Dominion South) 1.78 1.83
Chicago Citygate 2.02 2.18
Algonquin Citygate 2.55 2.18
SoCal Citygate 9.34 9.62
Waha Hub 1.51 1.34
AECO 1.98 1.98
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 34.00 30.50
PJM West 27.50 24.00
Ercot North 18.00 24.25
Mid C 66.00 82.42
Palo Verde 40.00 60.50
SP-15 49.25 68.50
(Reporting by Scott DiSavino; editing by Jonathan Oatis and David Gregorio)
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