US natgas prices climb 3% to three-week high on colder forecasts, rising LNG flows

Adds latest prices

By Scott DiSavino

Feb 14 (Reuters) - U.S. natural gas futures climbed about 3% to a three-week high on Friday on rising flows to liquefied natural gas (LNG) export plants, a drop in daily output and forecasts for colder weather lifting expected heating demand next week.

Front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange rose 9.7 cents, or 2.7%, to settle at $3.725 per million British thermal units (mmBtu), their highest close since January 24.

That also put the front-month up for a fifth day in a row for the first time since November 2024.

For the week, the contract was up about 13% after gaining about 9% last week.

Looking ahead, the 12-month futures strip NG12Mst was trading at $4.16 per mmBtu, its highest since December 2022.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.6 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 that is again freezing wells in some parts of the country, daily output was on track to drop by around 3.2 bcfd over the last eight days to a preliminary three-week low of 103.6 bcfd on Friday. 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 23 before switching to near normal levels from February 24-March 1.

With mostly colder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, will rise from 138.7 bcfd this week to 147.9 bcfd next week, before dropping to 134.4 bcfd in two weeks as the weather warms. The forecasts for this week and next were higher 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 15.3 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 hit a record 16.0 bcfd on Thursday, topping the prior all-time daily high of 15.8 bcfd on January 18. That fresh record came as flows to Venture Global's VG.N 2.6-bcfd Plaquemines LNG export plant under construction in Louisiana hit a fresh high of 1.4 bcfd.

The United States 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 around $15 per mmBtu at both the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and the Japan Korea Marker (JKM) JKMc1 benchmark in Asia. For JKM, that was a two-month high.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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