US natgas prices hold at one-week high on rising LNG flows, colder forecasts

• US gas storage withdrawals may have hit a record high in January
• US gas production on track for record high in February
• US LNG export feedgas on track for record high in February

By Scott DiSavino

Feb 7 (Reuters) - U.S. natural gas futures held near a one-week high on Friday on rising flows to liquefied natural gas (LNG) export plants and forecasts for colder weather and higher heating demand over the next two weeks than previously expected.

Front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange remained unchanged at $3.412 per million British thermal units (mmBtu) at 7:50 a.m. EST (1250 GMT). On Thursday, the contract closed at its highest since January 29 for a second day in a row.

For the week, the front-month was up about 12% after dropping about 24% last week.

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 106.1 billion cubic feet per day (bcfd) so far in February, up 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.

On a daily basis, output was on track to fall by 1.1 bcfd to a preliminary one-week low of 105.4 bcfd on Friday. That compares with a daily record high of 106.5 bcfd on January 31. Analysts noted preliminary data is often revised later in the day.

After extreme cold last month boosted heating demand to an all-time high, analysts said energy firms may have pulled a record amount of gas out of storage in January. The current record monthly storage withdrawal is 994 bcf in January 2022, according to federal energy data.

Meteorologists projected weather in the Lower 48 states would remain mostly colder than normal through February 22.

With colder weather coming, LSEG forecasts average gas demand in the Lower 48 states, including exports, will rise from 124.3 bcfd this week to 133.4 bcfd next week and 133.9 bcfd in two weeks. The forecast for next week was lower than LSEG's outlook on Thursday.

The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 15.1 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.

The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices feed demand for more exports, due in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.

Gas was trading at a 15-month high of around $17 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and an eight-week high of around $15 at the Japan Korea Marker (JKM) JKMc1 benchmark in Asia. NG/EU

For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.

For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminal

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For next-day SNL U.S. gas prices, see: 0#SNL-NG

For next-day SNL U.S. power prices, see: 0#SNL-PWR

For U.S. natgas price and storage polls, see: NGAS/POLL

For U.S. nuclear power outages, see: NUKE/

For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S. natural gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

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