US natgas prices jump 5% on record flows to LNG export plants

Tue, 25th Feb 2025 20:01

Mild weather allows frozen wells to return to service

US gas output near record high in February

US LNG export feedgas on track for record high in February

(Adds latest prices)

Feb 25 (Reuters) - U.S. natural gas futures jumped about 5% on Tuesday with flows to liquefied natural gas (LNG) export plants near record highs.

On its second to last day as the front-month, gas futures for March delivery on the New York Mercantile Exchange rose 18.0 cents, or 4.5%, to settle at $4.174 per million British thermal units (mmBtu).
Futures for April, which will soon be the front-month, were trading up about 3% to $4.11 per mmBtu.

Those price increases came despite near record output so far this month and forecasts for milder weather and lower
heating demand this week than previously expected that should allow utilities to pull less gas out of storage than normal for
this time of year.

Traders, however, noted extreme cold earlier this year forced energy firms to pull huge amounts of gas out of storage, including record amounts in January, cutting stockpiles to about 11% below the five-year (2020-2024) usual.

SUPPLY AND DEMAND

Financial company LSEG said average gas output in the Lower 48 U.S. states rose to 104.5 billion cubic feet per day (bcfd) so far in February from 102.7 bcfd in January, when freezing oil and gas wells and pipes, known as freeze-offs, cut production. That
compares with a monthly record of 104.6 bcfd in December 2023.

Over the past couple of weeks, daily output dropped from a record high of 106.7 bcfd on February 6 to a three-week low of 100.5 bcfd on February 19 as extreme cold across much of the country froze wells before rising to a one-week high of 104.3 bcfd
on February 25 as milder weather unfroze those wells.

Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through March 12.

With milder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 124.8 bcfd this week to 118.4 bcfd next week. The forecast for this week was lower than LSEG's outlook on Monday.

The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 15.6 bcfd so far in February, up from 14.6 bcfd in January. That compares with a monthly record high of 14.7 bcfd in December 2023.
On a daily basis, LNG feedgas hit a record 16.4 bcfd on Sunday, topping the prior all-time high of 16.3 bcfd on February
19.

The LNG daily feedgas high occurred as flows to Venture Global's 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana hit a record 1.8 bcfd on Sunday.

The U.S. became the world's biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due partly to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.

Gas was trading at around $14 per mmBtu at both the Dutch Title Transfer Facility (TTF) benchmark in Europe and the Japan Korea Marker (JKM) benchmark in Asia.

UK oil major Shell estimated global demand for LNG would rise by around 60% by 2040, driven largely by economic growth in Asia, artificial intelligence (AI) and efforts to cut emissions in heavy industries and transportation.

Week ended Week ended Year ago Five-year
Feb 21 Feb 14 Feb 21 average
Forecast Actual Feb 21
U.S. weekly natgas storage change (bcf): -248 -196 -86 -141
U.S. total natgas in storage (bcf): 1,853 2,101 2,401 2,078
U.S. total storage versus 5-year average -10.8% -5.3%

Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2024 (2019-2023)
Henry Hub 4.03 3.99 1.80 2.41 3.52
Title Transfer Facility (TTF) 14.18 14.20 8.12 10.95 15.47
Japan Korea Marker (JKM) 14.34 14.18 8.93 11.89 15.23

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 288 297 256 344 338
U.S. GFS CDDs 7 6 13 10 8
U.S. GFS TDDs 295 303 259 354 346

LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2020-2024)
Average For
Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 103.0 103.4 103.2 103.2 95.8
U.S. Imports from Canada 11.1 9.7 8.8 N/A 8.0
U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2
Total U.S. Supply 114.1 113.1 112.0 N/A 104.0

U.S. Demand (bcfd)
U.S. Exports to Canada 2.5 3.5 3.0 N/A 2.9
U.S. Exports to Mexico 5.3 5.2 5.6 N/A 5.0
U.S. LNG Exports 20.7 14.4 14.5 14.0 11.3
U.S. Commercial 14.6 14.3 13.5 12.9 15.9
U.S. Residential 35.4 22.8 21.4 20.0 26.4
U.S. Power Plant 34.3 31.9 28.1 30.6 30.0
U.S. Industrial 27.0 24.8 24.5 24.5 25.1
U.S. Plant Fuel 5.1 5.1 5.1 5.1 5.1
U.S. Pipe Distribution 3.3 2.7 2.5 2.8 4.0
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.2
Total U.S. Consumption 125.9 101.7 95.3 96.0 106.7
Total U.S. Demand 148.0 124.8 118.4 N/A 125.9

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam 2025 2025 2024 2023 2022
(Fiscal year ending Sep 30) Current Day Prior Day % of Normal % of Normal % of Normal
% of Normal % of Normal Actual Actual Actual
Forecast Forecast
Apr-Sep 85 87 74 83 107
Jan-Jul 83 85 76 77 102
Oct-Sep 85 86 77 76 103

U.S. weekly power generation percent by fuel - EIA
Week ended Week ended 2024 2023 2022
Feb 28 Feb 21
Wind 11 11 11 10 11
Solar 5 4 5 4 3
Hydro 6 6 6 6 6
Other 1 1 1 2 2
Petroleum 0 0 0 0 0
Natural Gas 37 39 42 41 38
Coal 20 22 16 17 21
Nuclear 19 17 19 19 19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub <NG-W-HH-SNL> 3.86 4.43
Transco Z6 New York <NG-CG-NY-SNL> 3.65 4.35
PG&E Citygate <NG-CG-PGE-SNL> 3.28 3.82
Eastern Gas (old Dominion South) <NG-PCN-APP-SNL> 3.49 3.96
Chicago Citygate <NG-CG-CH-SNL> 3.55 4.17
Algonquin Citygate <NG-CG-BS-SNL> 4.25 11.48
SoCal Citygate <NG-SCL-CGT-SNL> 3.86 4.22
Waha Hub <NG-WAH-WTX-SNL> 2.26 2.60
AECO <NG-ASH-ALB-SNL> 1.13 1.25

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day Prior Day
New England <E-NEPLMHP-IDX> 67.51 142.20
PJM West <E-PJWHDAP-IDX> 38.89 46.56
Mid C <W-MIDCP-IDX> 23.21 27.69
Palo Verde <W-PVP-IDX> 17.13 18.06
SP-15 <W-SP15-IDX> 9.27 19.02