S&P GSCI NATURAL GAS INDEX
By Scott DiSavino
Feb 15 (Reuters) - U.S. natural gas futures slid about 2% to a fresh 3-1/2-year low on Thursday on rising, near-record
output and a smaller-than-expected storage withdrawal last week when warm weather kept heating demand low.
That price decline occurred despite forecasts for more demand over the next two weeks than previously expected, and as
some producers said they would reduce drilling in 2024 due to the recent price plunge.
The U.S. Energy Information Administration (EIA) said utilities pulled a smaller-than-expected 49 billion cubic feet (bcf)
of gas out of storage during the week ended Feb. 9.
That was lower than the 68-bcf withdrawal analysts forecast in a Reuters poll and compared with a decrease of 117 bcf in the
same week last year and a five-year (2019-2023) average decline of 119 bcf for this time of year.
The combination of near-record production, mostly warmer-than-usual weather and low heating demand so far this winter, other
than the Arctic freeze in mid-January, has allowed utilities to leave more gas in storage than usual. Stockpiles were about 16%
above normal levels for this time of year.
U.S. energy firm Antero Resources, a big gas producer, said it expects gas production to decline by about 3% in 2024
versus 2023. Antero also said it expects to cut its drilling and completion capital budget by 26% after reducing the number of
rigs in operation to two from three, and cutting one of two completion crews.
Comstock Resources, another big U.S. gas producer, made a similar announcement about reducing gas rigs earlier this
week.
But even if some energy firms reduce gas drilling, gas output could still increase because oil prices are high enough
to encourage producers to seek more oil in shale basins like the Permian in Texas and New Mexico and the Bakken in North Dakota. A
lot of associated gas also comes out of the ground with oil in those shale basins.
After falling about 24% over the last eight days, front-month gas futures for March delivery on the New York Mercantile
Exchange fell 2.8 cents, or 1.7%, to settle at $1.581 per million British thermal units, their lowest close since June 2020 during
the height of COVID-19 demand destruction.
That kept the contract in technically oversold territory for an eighth day in a row for the first time since February 2018.
SUPPLY AND DEMAND
Financial company LSEG said gas output in the U.S. Lower 48 states has risen to an average of 105.8 billion cubic feet per day
(bcfd) so far in February, up from 102.1 bcfd in January, but shy of the monthly record high of 106.3 bcfd in December.
Meteorologists projected the weather across the Lower 48 states would remain mostly warmer than normal through March 1, with
next week expected to be slightly cooler than this week.
With slightly cooler weather coming, LSEG forecast U.S. gas demand in the Lower 48, including exports, would rise from 125.1
bcfd this week to 127.7 bcfd next week. Those forecasts were higher than LSEG's outlook on Wednesday.
Gas flows to the seven big U.S. liquefied natural gas (LNG) export plants have fallen to an average of 13.6 bcfd so far in
February, down from 13.9 bcfd in January and a monthly record of 14.7 bcfd in December.
Analysts do not expect U.S. LNG feedgas to return to record levels until Freeport LNG is back at full power, which could occur
in late February.
Week ended Week ended Year ago Five-year
Feb 9 Feb 2 Feb 9 average
Actual Actual Feb 9
U.S. weekly natgas storage change (bcf): -49 -75 -117 -149
U.S. total natgas in storage (bcf): 2,535 2,584 2,280 2,187
U.S. total storage versus 5-year average 15.9% 10.6%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2023 (2018-2022)
Henry Hub 1.63 1.61 2.44 2.66 3.60
Title Transfer Facility (TTF) 7.98 7.84 16.52 13.04 14.39
Japan Korea Marker (JKM) 9.37 9.41 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 30-Year
Norm Norm
U.S. GFS HDDs 329 332 337 389 376
U.S. GFS CDDs 3 3 14 7 6
U.S. GFS TDDs 332 336 351 396 382
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 105.8 105.8 105.8 102.0 92.4
U.S. Imports from Canada 9.2 8.8 9.2 8.7 9.1
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2
Total U.S. Supply 115.0 114.6 115.0 110.7 101.7
U.S. Demand (bcfd)
U.S. Exports to Canada 3.6 3.5 3.5 3.1 2.7
U.S. Exports to Mexico 6.2 6.7 6.4 5.1 5.2
U.S. LNG Exports 13.3 13.8 13.4 13.2 8.4
U.S. Commercial 13.8 13.7 14.6 14.0 16.3
U.S. Residential 22.3 22.1 23.7 22.9 27.6
U.S. Power Plant 31.0 32.7 33.0 29.5 29.3
U.S. Industrial 24.4 24.5 24.9 24.4 25.4
U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.3
U.S. Pipe Distribution 2.6 2.7 2.8 2.6 2.7
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 99.4 101.1 104.4 98.7 106.7
Total U.S. Demand 122.5 125.1 127.7 120.1 123.0
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 78 78 83 107 81
Jan-Jul 80 80 77 102 79
Oct-Sep 80 81 76 103 81
U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Feb 16 Feb 9 Feb 2 Jan 26 Jan 19
Wind 9 14 9 7 10
Solar 4 3 3 2 2
Hydro 7 7 7 6 6
Other 1 1 2 2 2
Petroleum 0 0 0 0 0
Natural Gas 41 38 40 43 39
Coal 16 16 18 22 23
Nuclear 22 21 20 19 17
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 1.51 1.61
Transco Z6 New York 1.38 2.08
PG&E Citygate 2.92 3.14
Eastern Gas (old Dominion South) 1.20 1.49
Chicago Citygate 1.49 1.58
Algonquin Citygate 3.39 5.76
SoCal Citygate 2.79 2.89
Waha Hub 0.92 1.19
AECO 1.22 1.23
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England 42.50 47.00
PJM West 23.00 28.50
Ercot North 16.25 10.50
Mid C 64.00 58.50
Palo Verde 24.50 28.00
SP-15 21.75 27.25
(Reporting by Scott DiSavino; editing by Jonathan Oatis, Barbara Lewis and Paul Simao)
US natgas prices slide 2% to fresh 3-1/2-year low on small storage withdrawal
February 15, 2024 at 11:15 am EST
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