S&P GSCI NATURAL GAS INDEX
By Scott DiSavino
March 4 (Reuters) - U.S. natural gas futures climbed about 4% to a three-week high on Monday as producers cut output after
prices collapsed to a 3-1/2-year low in recent weeks.
Front-month gas futures for April delivery on the New York Mercantile Exchange rose 8.1 cents, or 4.4%, to settle at
$1.916 per million British thermal units (mmBtu), their highest close since Feb. 8.
Prices collapsed to an intraday low of $1.511 per mmBtu on Feb. 27, their lowest since June 2020, as near record output, mild
weather and low heating demand allowed utilities to leave significantly more gas in storage than usual for this time of year.
Analysts estimated current gas stockpiles were around 31% above-normal levels.
A 14%-increase in gas prices last week prompted speculators to cut their net short futures and options positions on the New
York Mercantile and Intercontinental Exchanges for the first time in six weeks.
That decline in shorts, however, came after speculators boosted those short positions two weeks ago to their highest since
March 2020 when futures prices were still plunging.
In the spot market, meanwhile, next-day gas at the Henry Hub benchmark in Louisiana fell to $1.47 per mmBtu, its
lowest since October 2020.
SUPPLY AND DEMAND
Financial company LSEG said gas output in the U.S. Lower 48 states fell to an average of 100.6 billion cubic feet per day
(bcfd) so far in March, down from 104.1 bcfd in February. That compares with a monthly record high of 105.5 bcfd in December 2023.
Traders said the output drop showed that several energy firms, like Chesapeake Energy - soon to be the biggest U.S.
gas producer after its merger with Southwestern Energy - were following through on plans to cut gas drilling this year.
Despite the expected decline in gas drilling, some analysts have warned gas output could still increase this year because oil
prices were high enough to encourage producers to keep drilling for oil in shale basins like the Permian in Texas and New
Mexico and the Bakken in North Dakota.
The number of rigs drilling for oil rose last week to its highest since September 2023. Shale oil wells in the Permian and
Bakken produce a lot of associated gas.
Meteorologists projected the weather across the Lower 48 states would remain mostly warmer than normal through March 17 before
turning seasonally normal on March 18-19.
With cooler temperatures coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 111.5 bcfd
this week to 113.5 bcfd next week. Those forecasts were lower than LSEG's outlook on the Friday.
Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants climbed to an average of 13.9 bcfd so far in March,
up from 13.7 bcfd in February. That compares with a monthly record of 14.7 bcfd in December.
Analysts do not expect U.S. LNG feedgas to return to record levels until Freeport LNG is back at full power, which some market
watchers say could happen in mid-March.
Week ended Week ended Year ago Five-year
Mar 1 Feb 23 Mar 1 average
Forecast Actual Mar 1
U.S. weekly natgas storage change (bcf): -34 -96 -72 -93
U.S. total natgas in storage (bcf): 2,340 2,374 2,054 1,783
U.S. total storage versus 5-year average 31.2% 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 1.98 1.84 2.41 2.66 3.60
Title Transfer Facility (TTF) 8.22 8.15 13.72 13.04 14.39
Japan Korea Marker (JKM) 8.30 8.37 13.59 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 30-Year
Norm Norm
U.S. GFS HDDs 227 247 324 306 304
U.S. GFS CDDs 14 12 13 13 11
U.S. GFS TDDs 241 259 337 319 315
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 102.3 100.8 101.5 101.8 95.1
U.S. Imports from Canada 8.3 7.6 8.6 8.6 8.4
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1
Total U.S. Supply 110.6 108.5 110.1 110.4 103.6
U.S. Demand (bcfd)
U.S. Exports to Canada 3.6 3.7 3.7 3.1 3.0
U.S. Exports to Mexico 7.7 6.9 7.6 5.6 5.4
U.S. LNG Exports 14.0 13.9 13.7 13.1 9.2
U.S. Commercial 12.9 10.2 10.9 12.7 12.3
U.S. Residential 20.0 15.3 16.3 20.2 19.4
U.S. Power Plant 30.2 30.8 30.0 30.9 23.8
U.S. Industrial 24.5 23.4 23.8 23.6 26.8
U.S. Plant Fuel 5.1 5.0 5.0 5.0 5.0
U.S. Pipe Distribution 2.5 2.3 2.4 2.3 2.3
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 95.2 87.1 88.5 94.8 89.7
Total U.S. Demand 120.5 111.5 113.5 116.6 107.3
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 84 79 83 107 81
Jan-Jul 84 81 77 102 79
Oct-Sep 85 81 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Mar 8 Mar 1 Feb 23 Feb 16 Feb 9
Wind 19 16 13 11 14
Solar 4 4 4 4 3
Hydro 7 7 7 7 7
Other 1 1 1 1 1
Petroleum 0 0 0 0 0
Natural Gas 35 38 40 41 38
Coal 12 16 15 16 16
Nuclear 21 21 20 21 21
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 1.47 1.67
Transco Z6 New York 1.40 1.47
PG&E Citygate 2.65 2.65
Eastern Gas (old Dominion South) 1.30 1.37
Chicago Citygate 1.47 1.47
Algonquin Citygate 1.50 1.74
SoCal Citygate 2.10 2.33
Waha Hub 0.67 0.53
AECO 1.26 1.26
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 26.00 29.75
PJM West 25.00 29.25
Ercot North 15.00 19.50
Mid C 64.00 45.60
Palo Verde 15.25 14.50
SP-15 13.75 13.50
(Reporting by Scott DiSavino; Editing by Richard Chang)
US natgas prices climb 4% to 3-week high as output drops
March 04, 2024 at 02:58 pm EST
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