HomeNewsU.S. natgas prices climb 2% to 15-week high on output drop, demand rise

U.S. natgas prices climb 2% to 15-week high on output drop, demand rise

5/15/2024

(Reuters)—U.S. natural gas futures climbed about 2% to a 15-week high on Wednesday on a drop in output and forecasts for warmer weather over the next two weeks that should boost the amount of gas power generators burn to produce electricity to keep air conditioners humming.

That price increase was kept in check by the tremendous oversupply of gas still in storage. Analysts forecast gas stockpiles were about 31% above normal levels for this time of year.

Financial firm LSEG said gas output in the Lower 48 U.S. states fell to an average of 97.1 Bft3d so far in May, down from 98.2 Bft3d in April. That compares with a monthly record high of 105.5 Bft3d in December 2023.

On a daily basis, output dropped by around 3 Bft3d over the past three days to a preliminary 17-week low of 95.2 Bft3d on Wednesday.

That put U.S. gas production down about 10% so far in 2024 after several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March.

EQT is the biggest U.S. gas producer and Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy. Meteorologists projected weather across the Lower 48 states would turn from near normal now to warmer than normal levels from May 18-30.

LSEG forecast gas demand in the Lower 48, including exports, would rise from 92.4 Bft3d this week to 92.7 Bft3d next week. The forecast for this week was higher LSEG's outlook on Tuesday.

Gas flows to the seven big U.S. LNG export plants rose from an average of 11.9 Bft3d in April to 12.6 Bft3d so far in May with the return to full service of Freeport LNG’s 2.1- Bft3d export plant in Texas. That compares with a monthly record high of 14.7 Bft3d in December.

But on a daily basis, LNG feedgas was on track to hold at 12.4 Bft3d for a second day on Wednesday as flows to Freeport remain at an 11-month high of 2.1 Bft3d for a third day because flows to Cheniere Energy's Sabine Pass in Louisiana fell to a seven-month low of 3.8 Bft3d.

 

Related News

Comments

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