HomeNewsU.S. natural gas prices fall 3% on forecasts for milder weather, lower LNG feedgas

U.S. natural gas prices fall 3% on forecasts for milder weather, lower LNG feedgas

1/24/2025
  • Utilities on track to pull more than 300 Bft3 of gas out of storage this week
  • Energy firms have restored most gas curtailed by freeze-offs over past week
  • LNG feedgas down on lower flows to Freeport LNG and Cheniere plants in Texas

U.S. natural gas futures slid about 3% on Friday on forecasts for milder weather over the next two weeks than previously expected and a recent drop in gas flows to liquefied natural gas (LNG) export plants, due in part to the shutdown and slow return of Freeport LNG's plant in Texas.

Front-month gas futures for February delivery on the New York Mercantile Exchange were down 11.4 cents, or 2.9%, to $3.831 per million British thermal units (MMBtu).

For the week, the contract was down about 3% after easing about 1% last week.

To meet record demand for gas for heat during extreme cold weather this week, analysts projected energy firms pulled about 317 Bft3 of gas out of storage during the week ended Jan. 24. That would fall short of the record weekly withdrawal of 359 Bft3 during a freeze in January 2018.

But it would be the biggest weekly storage withdrawal since January 2024 and would erase the small surplus of gas in inventory over the five-year average for the first time since January 2022.

Some analysts said storage withdrawals in January could top the current monthly record high of 994 Bft3 set in January 2022, according to federal energy data.

Supply and demand. Financial firm LSEG said average gas output in the Lower 48 U.S. states has fallen from 104.2 Bft3d in December to 101.9 Bft3d so far in January, due mostly to freezing oil and gas wells and pipes, known as freeze-offs. That compares with a monthly record of 104.5 Bft3d in December 2023.

Freeze-offs from Jan. 18–21 cut output by 6.9 Bft3d to a one-year low of 96.9 Bft3d on Tuesday. About 5.1 Bft3d of that output, however, was already on track to return by Friday.

In past years, freeze-offs cut gas output by roughly 8.1 Bft3d from Jan. 9–16 in 2024, 4.6 Bft3d from Jan. 31–Feb. 1 in 2023, 15.8 Bft3d from Dec. 20–24 in 2022, and 20.4 Bft3d from Feb. 8–17 in 2021, according to LSEG data.

Meteorologists projected that weather in the Lower 48 states would remain colder than normal through Jan. 27, before turning mostly near normal from Jan. 28–Feb. 8.

With the milder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, would fall from 156.9 Bft3d this week to 142.0 Bft3d next week and 133.5 Bft3d in two weeks. The forecasts for this week and next were similar to LSEG's outlook on Thursday.

On a daily basis, LSEG said total gas use peaked at 173.3 Bft3d on Jan. 20 and 181.3 Bft3d on Jan. 21, easily topping the prior daily record high of 168.4 Bft3d on Jan. 16, 2024.

The amount of gas flowing to the eight big U.S. LNG export plants has risen to an average of 14.7 Bft3d so far in January, up from 14.4 Bft3d in December. That compares with a monthly record high of 14.7 Bft3d in December 2023.

On a daily basis, however, LNG feedgas was on track to rise to 13.4 Bft3d on Friday, up from a nine-month low of 10.6 Bft3d on Thursday when Freeport LNG's 2.1-Bft3d export plant in Texas was only pulling in about 0.1 Bft3d and Cheniere Energy's 2.4-Bft3d Corpus Christi plant in Texas was only pulling in about 1.0 Bft3d, a 33-month low.

Flows to Freeport LNG, which shut due to power issues during a winter storm on Tuesday, were on track to rise to 1.4 Bft3d on Friday, up from near zero on Tuesday and Wednesday and 0.1 Bft3d on Thursday. That compares with an average of 1.9 Bft3d over the prior week.

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