US natgas prices climb 2% to two-week high on rising LNG flows, cold weather

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By Scott DiSavino

Feb 13 (Reuters) - U.S. natural gas futures climbed about 2% to a two-week high on Thursday on a slightly bigger-than-expected storage draw last week, rising flows to liquefied natural gas (LNG) export plants, a drop in daily output and forecasts for cold weather and higher demand over the next two weeks than previously expected.

The U.S. Energy Information Administration said energy firms pulled 100 billion cubic feet (bcf) of gas out of storage during the week ended February 7. That was a little over the 95-bcf draw analysts forecast in a Reuters poll and compares with a drop of 60 bcf during the same week last year and a five-year average draw of 144 bcf for this time of year. EIA/GAS NGAS/POLL

Analysts said energy firms pulled less gas out of storage last week than the five-year normal because mild weather kept heating demand low.

Front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange rose 6.3 cents, or 1.8%, to settle at $3.628 per million British thermal units (mmBtu), their highest close since January 27 for a second day in a row. That put the front-month up for a fourth day in a row for the first time since December 2024.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.7 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.

But with the return of extreme cold freezing wells in some parts of the country again, daily output was on track to drop by 3.7 bcfd over the past seven days to a preliminary two-week low of 103.0 bcfd on Thursday. That compares with a daily record high of 106.7 bcfd on February 6. Analysts noted that preliminary data is often revised later in the day.

Meteorologists projected weather in the Lower 48 states would remain mostly colder than normal through February 22 before switching to near normal levels from February 23-28.

With mostly colder weather coming, LSEG forecasts that average gas demand in the Lower 48 states, including exports, will rise from 138.4 bcfd this week to 145.9 bcfd next week. Those forecasts were higher than LSEG's outlook on Wednesday.

The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 15.3 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 was on track to hit 15.9 bcfd on Thursday, up from 15.6 bcfd on Wednesday and an average of 15.3 bcfd over the prior seven days. If correct, LNG flows on Thursday would top the current daily record of 15.8 bcfd on January 18.

The latest LNG feedgas high came with flows to Venture Global's VG.N 2.6-bcfd Plaquemines export plant under construction in Louisiana set to hit a record 1.4 bcfd on Tuesday-Thursday.

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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