US natgas prices rise on cold forecasts, ahead of storage report

Dec 27 (Reuters) - U.S. natural gas futures rose over 3% on Friday, supported by forecasts for much colder weather in coming weeks while increasing amount of gas flowing to liquefied natural gas export plants also helped prices, ahead of weekly federal storage report.

Front-month gas futures NGc1 for January delivery on the New York Mercantile Exchange rose 13.7 cents, or 3.7%, to $3.85 per million British thermal units (mmBtu) as of 08:28 a.m. EST (1328 GMT).

The contract is up about 2.8% so far this week after prices hit $4.01/mmBtu level on Thursday, its highest since Jan 2023.

A combination of factors have supported the market, as per Robert DiDona, president of Energy Ventures Analysis.

"One is that overnight weather models added heating degree days to the short term outlook so that improved the demand forecast. Two is that, it was a short holiday week and we have a delayed storage report which comes out later today so that adds some volatility and then three being the January contract roll off."

The U.S. Energy Information Administration (EIA) will release its weekly storage report at 10:30 a.m. EST. U.S. energy firms likely pulled 98 billion cubic feet (bcf) of natural gas from storage last week, according to the average estimate of analysts in a Reuters poll on Thursday. EIA/GAS

That compares with a withdrawal of 87 bcf during the same week a year ago and a five-year (2019-2023) average decrease of 127 bcf for this time of year.

Financial firm LSEG estimated 399 heating degree days over the next two weeks, compared with 393 estimated on Thursday.

It also forecast average gas demand in the Lower 48, including exports, jumping to 141.5 bcfd next week from 119.1 bcfd this week.

The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 14.8 bcfd so far in December from 13.6 bcfd in November.

U.S. liquefied natural gas (LNG) company Venture Global LNG's tanker Venture Bayou departed the Plaquemines export plant in Louisiana for Germany, carrying the first LNG cargo produced at the facility, the company said on Thursday.

LSEG said average gas output in the Lower 48 U.S. states rose to 103.1 billion cubic feet per day (bcfd) so far in December from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023.

Dutch and British wholesale gas prices rose, supported by forecasts of cold weather in early January and fading hopes for a new deal to transit Russian gas through Ukraine. The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was trading at $14.55 per mmBtu. NG/EU

(Reporting by Anmol Choubey and Anjana Anil in Bengaluru; Editing by Chizu Nomiyama)

((anmol.choubey@thomsonreuters.com;))

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