HomeNewsU.S. natural gas rises over 7%, helped by cooler weather forecasts

U.S. natural gas rises over 7%, helped by cooler weather forecasts

2/28/2024

(Reuters) - U.S. natural gas futures gained more than 7%, rebounding from a four-year low hit in the previous session, helped by forecasts for slightly cooler weather leading to increased demand for gas for heating.

Front-month gas futures for April delivery rose 7.7 cents, or 7.7%, to settle at $1.885 per MMBtu. Prices dropped to as low as $1.51 in the previous session, its weakest level since June 2020, hurt by surplus supplies.

"Today prices are all about weather's starting to get a little bit colder and production tallying off a bit," said Phil Flynn, an analyst at Price Futures Group.

"But, unless forecasts project it to be cold through March, it is not going to be enough to offset all the heating degree days that we missed."

LSEG estimated 260 heating degree days (HDDs) for the year as of Wednesday, compared with 259 HDDs on Tuesday.

LSEG said gas output in the U.S. Lower 48 states rose to an average of 105 Bcfd so far in February, up from 102.1 bcfd in January, but still short of the monthly record high of 106.3 bcfd in December.

On a daily basis, however, output so far this week was at 102.4 bcf compared to 104.3 bcf last week.

Last week, prices soared about 13% after Chesapeake Energy, soon to be the biggest U.S. gas producer after its merger with Southwestern Energy, cut planned production for 2024 by roughly 30% after a recent plunge in prices.

Natural gas prices have plunged around 26% so far this year, hurt by a mild winter that has left stockpiles well above normal, while output remained near record levels despite an Arctic freeze in January that briefly cut output and sent gas demand to a record high.

Market participants also kept tabs on a wildfire that ripped across the Texas Panhandle.

Dutch and British wholesale gas prices were steady, with ample supply despite an increased impact from a Norwegian outage.

Qatar's planned expansion of LNG production could see it control nearly 25% share of the global market by 2030 and squeeze out rival projects, including in the U.S. where President Joe Biden has paused new export approvals, market experts say.

 

Week ended Feb 23

Forecast

Week ended Feb 16 Actual

Year ago Feb 23

Five-year average

Feb 23

  

U.S. weekly natgas storage change (bcf):

-97

-60

-79

-143

  

U.S. total natgas in storage (bcf):

2,373

2,470

2,126

1,876

  

U.S. total storage versus 5-year average

26.5%

        
           
           

Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2023

Five Year Average (2018-2022)

Henry Hub <NGc1>

1.79

1.55

2.44

2.66

3.60

Title Transfer Facility (TTF) <TRNLTTFMc1>

8.07

7.35

16.52

13.04

14.39

Japan Korea Marker (JKM) <JKMc1>

8.22

8.3

16.87

14.39

14.31
           
           

LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days

          

Two-Week Total Forecast

Current Day

Prior Day

Prior Year

10-Year Norm

30-Year Norm

U.S. GFS HDDs

260.1

258.7

331.07

385.79

386.24

U.S. GFS CDDs

8.5

9.6

15.09

7.35

5.71

U.S. GFS TDDs

268.6

268.3

346.09

393.14

354
           

LSEG U.S. Weekly GFS Supply and Demand Forecasts

          
 

Prior Week

Current Week

Next Week

This Week Last Year

Five-Year (2019-2023) Average For Month

U.S. Supply (bcfd)

          

U.S. Lower 48 Dry Production

105.1

103

103

101.3

92.4

U.S. Imports from Canada

9.0

8.3

8.7

8.7

9.1

U.S. LNG Imports

0.0

0.0

0.0

0.0

0.2

Total U.S. Supply

114.1

111.3

111.6

110.0

101.7
           

U.S. Demand (bcfd)

          

U.S. Exports to Canada

3.5

3.7

3.7

2.6

2.7

U.S. Exports to Mexico

6.4

6.6

6.4

5.8

5.2

U.S. LNG Exports

13.6

13.9

13.7

12.8

8.4

U.S. Commercial

14.8

12.7

11.0

14.1

16.3

U.S. Residential

23.8

19.6

17.1

22.6

27.6

U.S. Power Plant

34.3

29.8

29.9

30.3

29.3

U.S. Industrial

24.9

24.1

23.4

24.1

25.4

U.S. Plant Fuel

5.2

5.1

5.1

5.2

5.3

U.S. Pipe Distribution

2.8

2.5

2.4

2.7

2.7

U.S. Vehicle Fuel

0.1

0.1

0.1

0.1

0.1

Total U.S. Consumption

105.9

94.1

89.0

99.1

106.7

Total U.S. Demand

129.4

118.2

112.8

120.3

123.0
           
           

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam

Current Day % of Normal Forecast

Prior Day % of Normal Forecast

2023

% of Normal Actual

2022 % of Normal Actual

2021 % of Normal Actual

Apr-Sep

81

79

83

107

81

Jan-Jul

83

81

77

102

79

Oct-Sep

82

81

76

103

81
           
           

U.S. weekly power generation percent by fuel - EIA

          
 

Week ended March 1

Week ended Feb 23

Week ended Feb 16

Week ended Feb 9

Week ended Feb 2

Wind

15

12

11

14

9

Solar

5

4

4

3

3

Hydro

7

7

7

7

7

Other

1

1

1

1

2

Petroleum

0

0

0

0

0

Natural Gas

38

41

41

38

40

Coal

13

15

16

16

18

Nuclear

22

20

21

21

20
           

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

          

Hub

Current Day

Prior Day

      

Henry Hub <NG-W-HH-SNL>

1.52

1.65

      

Transco Z6 New York <NG-CG-NY-SNL>

1.35

1.27

      

PG&E Citygate <NG-CG-PGE-SNL>

2.72

2.40

      

Eastern Gas (old Dominion South) <NG-PCN-APP-SNL>

1.30

1.18

      

Chicago Citygate <NG-CG-CH-SNL>

1.41

1.33

      

Algonquin Citygate <NG-CG-BS-SNL>

1.48

1.47

      

SoCal Citygate <NG-SCL-CGT-SNL>

2.31

2.51

      

Waha Hub <NG-WAH-WTX-SNL>

0.36

0.39

      

AECO <NG-ASH-ALB-SNL>

1.72

1.74

      
           

SNL U.S. Power Next-Day Prices ($ per megawatt-hour)

          

Hub

Current Day

Prior Day

      

New England <EL-PK-NPMS-SNL>

23.75

25.00

      

PJM West <EL-PK-PJMW-SNL>

29.75

22.75

      

Ercot North <EL-PK-ERTN-SNL>

17.50

16.00

      

Mid C <EL-PK-MIDC-SNL>

43.25

41.00

      

Palo Verde <EL-PK-PLVD-SNL>

14.36

13.25

      

SP-15 <EL-PK-SP15-SNL>

11.50

4.5

      

 

Related News

Comments

{{ error }}
{{ comment.comment.Name }} • {{ comment.timeAgo }}
{{ comment.comment.Text }}