US natgas prices jump 8% to 3-week high as cold freezes wells

Adds latest prices

By Scott DiSavino

Feb 18 (Reuters) - U.S. natural gas futures jumped about 8% on Tuesday to a three-week high, as extreme cold in some parts of the country cut output by freezing oil and gas wells, while gas flows to liquefied natural gas (LNG) export plants reached records and forecasters predicted more cold weather and higher heating demand over the next two weeks.

Front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange rose 28.2 cents, or 7.6%, to settle at $4.007 per million British thermal units (mmBtu), their highest close since January 24 for a second day in a row.

That was the biggest daily percentage increase since Feb. 3 when prices soared by about 10%.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.2 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.

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 3.5 bcfd over the last 12 days to a preliminary three-week low of 103.2 bcfd on Monday.

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-March 5.

With milder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 146.4 bcfd this week to 129.9 bcfd next week. Those forecasts were lower than LSEG's outlook on Friday.

The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 15.4 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 Monday, topping the prior all-time daily high of 15.8 bcfd on January 18.

That LNG daily feedgas 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 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 $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. 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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