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(Reuters) – U.S. natural gas futures climbed about 4% to a two-week high on Thursday on rising flows to liquefied natural gas (LNG) export plants, a drop in daily output and forecasts for cold weather and higher demand over the next two weeks than previously expected.
Prices rose despite forecasts for the return of mild weather in late February.
Front-month gas futures for March delivery on the New York Mercantile Exchange rose 12.7 cents, or 3.6%, to $3.692 per million British thermal units (mmBtu) at 7:56 a.m. EST (1256 GMT), putting the contract on track for its highest close since January 27.
That puts the front-month up for a fourth day in a row for the first time since December 2024.
Looking ahead, the 12-month futures strip climbed to $4.15 per mmBtu, its highest since December 2022.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.7 billion cubic feet per day (bcfd) so far in February, up from 102.7 bcfd in January when freezing oil and gas wells and pipes, known as freeze-offs, cut production. That compares with a monthly record of 104.6 bcfd in December 2023.
But with the return of extreme cold freezing wells in some parts of the country again, daily output was on track to drop by 3.7 bcfd over the past seven days to a preliminary two-week low of 103.0 bcfd on Thursday. That compares with a daily record high of 106.7 bcfd on February 6. Analysts noted that preliminary data is often revised later in the day.
Meteorologists projected weather in the Lower 48 states would remain mostly colder than normal through February 22 before switching to near normal levels from February 23-28.
With mostly colder weather coming, LSEG forecasts that average gas demand in the Lower 48 states, including exports, will rise from 138.4 bcfd this week to 145.9 bcfd next week. Those forecasts were higher than LSEG’s outlook on Wednesday.
The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 15.3 bcfd so far in February, up from 14.6 bcfd in January. That compares with a monthly record high of 14.7 bcfd in December 2023.
On a daily basis, LNG feedgas was on track to hit 15.9 bcfd on Thursday, up from 15.6 bcfd on Wednesday and an average of 15.3 bcfd over the prior seven days. If correct, LNG flows on Thursday would top the current daily record of 15.8 bcfd on January 18.
The latest LNG feedgas high came with flows to Venture Global’s 2.6-bcfd Plaquemines export plant under construction in Louisiana set to hit a record 1.4 bcfd on Tuesday-Thursday.
The United States became the world’s biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices feed demand for more exports, due in part to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.
Gas was trading around $15 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and the Japan Korea Marker (JKM) benchmark in Asia.
Week ended Week ended Year ago Five-year
Feb 7 Jan 31 Feb 7 average
Forecast Actual Feb 7 U.S. weekly natgas storage change (bcf): -95 -174 -60 -144 U.S. total natgas in storage (bcf): 2,302 2,397 2,545 2,364 U.S. total storage versus 5-year average -2.7% -4.4%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2024 (2019-2023) Henry Hub 3.67 3.57 1.80 2.41 3.52 Title Transfer Facility (TTF) 15.80 17.01 8.12 10.95 15.47 Japan Korea Marker (JKM) 14.92 14.89 8.93 11.89 15.23
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 445 452 340 395 383 U.S. GFS CDDs 6 6 4 7 6 U.S. GFS TDDs 451 458 344 402 389
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2020-2024)
Average For
Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 106.3 105.2 105.0 105.7 95.8 U.S. Imports from Canada 9.9 10.3 9.7 N/A 8.0 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2 Total U.S. Supply 116.2 115.5 114.7 N/A 104.0
U.S. Demand (bcfd) U.S. Exports to Canada 3.6 3.4 3.4 N/A 2.9 U.S. Exports to Mexico 5.7 5.9 6.1 N/A 5.0 U.S. LNG Exports 14.0 14.2 14.5 13.3 11.3 U.S. Commercial 15.2 17.7 20.1 13.7 15.9 U.S. Residential 24.6 29.8 34.0 22.1 26.4 U.S. Power Plant 29.3 33.2 32.3 32.3 30.0 U.S. Industrial 24.8 25.9 26.8 24.5 25.1 U.S. Plant Fuel 5.3 5.2 5.2 5.3 5.1 U.S. Pipe Distribution 2.7 3.1 3.2 2.7 4.0 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.2 Total U.S. Consumption 102.0 114.9 121.8 100.7 106.7 Total U.S. Demand 125.3 138.4 145.9 N/A 125.9
N/A is Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam 2025 2025 2024 2023 2022 (Fiscal year ending Sep 30) Current Day Prior Day % of Normal % of Normal % of Normal
% of Normal % of Normal Actual Actual Actual
Forecast Forecast Apr-Sep 84 84 74 83 107 Jan-Jul 81 80 76 77 102 Oct-Sep 83 83 77 76 103
U.S. weekly power generation percent by fuel – EIA
Week ended Week ended 2024 2023 2022
Feb 14 Feb 7 Wind 9 13 11 10 11 Solar 3 4 5 4 3 Hydro 6 5 6 6 6 Other 1 1 1 2 2 Petroleum 0 0 0 0 0 Natural Gas 41 38 42 41 38 Coal 20 17 16 17 21 Nuclear 20 21 19 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 3.97 3.65 Transco Z6 New York 4.03 4.16 PG&E Citygate 3.97 3.78 Eastern Gas (old Dominion South) 3.84 3.47 Chicago Citygate 3.88 3.68 Algonquin Citygate 16.00 18.50 SoCal Citygate 4.39 4.33 Waha Hub 3.19 3.06 AECO 1.49 1.55
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 148.57 169.18 PJM West 45.97 58.88 Mid C 61.72 78.52 Palo Verde 38.22 45.03 SP-15 39.85 47.12
Reporting by Scott DiSavino Editing by Christina Fincher
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