S&P GSCI NATURAL GAS INDEX
Feb 27 (Reuters) - U.S. natural gas futures rebounded after crashing to their lowest levels in nearly four years ahead of
the March contract expiry on Tuesday, as excess inventories and near-record levels of output flooded the market overwhelmed by
milder temperatures.
Front-month gas futures for March delivery was up around 1% at $1.68 per million British thermal units after
dropping to as low as $1.511 earlier in the session, its weakest level since June 2020.
Prices were pressured, as "the market fundamentally is coming out of the winter at much higher storage levels than what we had
anticipated. It's been a very warm November through March, so weather related natural gas demand is lower, which allowed for
larger storage," said Robert DiDona of Energy Ventures Analysis.
Financial company LSEG said gas output in the U.S. Lower 48 states has risen to an average of 105.5 billion cubic feet per day
(bcfd) so far in February from 102.1 bcfd in January, still shy of the monthly record of 106.3 bcfd in December.
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.
DiDona noted that prices were also finding support from hot weather in the south, "even though it's technically February, we
shouldn't be talking about cooling degree days, but there are some spots in the country that have very high temperatures that
could actually be looking at cooling degree demand."
Summer-like temperatures ranging up to 40 degrees Fahrenheit above normal were forecast across a wide swath of the U.S.
Midwest, East Coast and South, setting the stage for a second record-breaking day in a row in some spots.
In Texas, temperatures were expected to top 80 degrees F (27 degrees Celsius) after hovering at about 94 degrees F (34 C)
in Dallas and other cities on Monday, the National Weather Service
said
.
Natural gas prices have plunged more than 32% 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.
The European benchmark wholesale gas price eased on Tuesday after posting moderate gains in the previous session, with
plentiful supplies and milder weather set to sap demand.
Qatar's planned expansion of liquefied natural gas (LNG) production could see it control nearly 25% share of the global market
by 2030 and squeeze out rival projects including in the United States where President Biden paused new export approvals, market
experts say.
Week ended Week ended Year ago Five-year
Feb 23 Feb 16 Feb 23 average
Forecast Actual 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 Prior Year Five Year
Last Year Average Average
2023 (2018-2022)
Henry Hub 2.44 2.66 3.60
1.55 1.73
Title Transfer Facility (TTF) 16.52 13.04 14.39
7.35 7.53
Japan Korea Marker (JKM) 16.87 14.39 14.31
8.3 8.13
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 331.07 385.79 386.24
258.7 258.5
U.S. GFS CDDs 15.09 7.35 5.71
9.6 9.6
U.S. GFS TDDs 346.09 393.14 354
268.3 268.1
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2019-2023)
Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 105.1 101.3 92.4
103.1 103.4
U.S. Imports from Canada 9.0 8.7 9.1
8.5 8.8
U.S. LNG Imports 0.0 0.0 0.2
0.0 0.0
Total U.S. Supply 114.1 110.0 101.7
111.6 112.2
U.S. Demand (bcfd)
U.S. Exports to Canada 3.5 2.6 2.7
3.7 3.7
U.S. Exports to Mexico 6.4 5.8 5.2
6.0 6.3
U.S. LNG Exports 13.6 12.8 8.4
13.9 13.6
U.S. Commercial 14.8 14.1 16.3
12.7 11.2
U.S. Residential 23.8 22.6 27.6
19.6 17.5
U.S. Power Plant 34.3 30.3 29.3
30.3 30.6
U.S. Industrial 24.9 24.1 25.4
24.1 23.5
U.S. Plant Fuel 5.2 5.2 5.3
5.1 5.1
U.S. Pipe Distribution 2.8 2.7 2.7
2.5 2.4
U.S. Vehicle Fuel 0.1 0.1 0.1
0.1 0.1
Total U.S. Consumption 105.9 99.1 106.7
94.4 90.4
Total U.S. Demand 129.4 120.3 123.0
118.0 114.0
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021
% of Normal % of Normal % of Normal % of Normal % of Normal
Forecast Forecast Actual Actual 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 Week ended Week ended Week ended Week ended
March 1 Feb 23 Feb 16 Feb 9 Feb 2
Wind 12 11 14 9
13
Solar 4 4 3 3
5
Hydro 7 7 7 7
7
Other 1 1 1 2
1
Petroleum 0 0 0 0
0
Natural Gas 41 41 38 40
39
Coal 15 16 16 18
14
Nuclear 20 21 21 20
22
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub
1.65 1.52
Transco Z6 New York
1.27 1.49
PG&E Citygate
2.40 2.49
Eastern Gas (old Dominion South)
1.18 1.39
Chicago Citygate
1.33 1.35
Algonquin Citygate
1.47 3.23
SoCal Citygate
2.51 2.37
Waha Hub
0.39 0.19
AECO
1.74 1.62
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England
25.00 30.75
PJM West
22.75 27.25
Ercot North
16.00 10.25
Mid C
41.00 35.66
Palo Verde
13.25 22.25
SP-15
4.5 21.50
(Reporting by Anjana Anil in Bengaluru
Editing by Nick Zieminski)
US natgas futures touch 4-year lows as surplus supplies overwhelm
February 27, 2024 at 12:56 pm EST
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