US natgas prices drop 6% to one-week low on mild weather forecasts

ReutersFeb 24, 2025 7:45 PM

Mild weather allows frozen wells to return to service
US gas output near record high in February
US LNG export feedgas on track for record high in February

Adds latest prices

By Anmol Choubey and Scott DiSavino

Feb 24 (Reuters) - U.S. natural gas futures dropped about 6% to a one-week low on Monday on forecasts for warmer weather and lower heating demand that should cut the amount of fuel utilities pull out of storage to meet heating demand in coming weeks.

"We are quickly getting closer to the start of spring and the market is pulling back on this warm-up," said Phil Flynn, an analyst at Price Futures Group.

Front-month gas futures NGc1 for March delivery on the New York Mercantile Exchange fell 24.0 cents, or 5.7%, to settle at $3.994 per million British thermal units (mmBtu), their lowest close since February 14.

That knocked the front-month out of technically overbought territory for the first time in five days.

"We have some selling back today and that's because we're not going to get the really strong (storage) withdrawals over the next three weeks that some folks were anticipating ... but long term, we are still well supported from a fundamental perspective through summer," said Gary Cunningham, director of market research at Tradition Energy.

Traders noted that extreme cold so far this year forced energy firms to pull huge amounts of gas out of storage, including record amounts in January, cutting stockpiles down to about 11% below the five-year (2020-2024) normal for this time of year. EIA/GAS NGAS/POLL

Worries about those falling stockpiles helped boost prices by around 39% over the past three weeks, prompting speculators to increase their net long futures and options positions last week on the New York Mercantile and Intercontinental Exchange to their highest since July 2021, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report.

SUPPLY AND DEMAND

Financial company LSEG said average gas output in the Lower 48 U.S. states rose to 104.5 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.

Over the past couple of weeks, daily output dropped from a record high of 106.7 bcfd on February 6 to a three-week low of 100.5 bcfd on February 19 as extreme cold across much of the country froze wells before rising to a one-week high of 103.8 bcfd on February 23 as milder weather unfroze those wells.

Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through March 11.

With milder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 127.0 bcfd this week to 118.3 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 15.6 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 16.4 bcfd on Sunday, topping the prior all-time high of 16.3 bcfd on February 19.

The LNG daily feedgas high occurred as flows to Venture Global's VG.N 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana hit a record 1.8 bcfd.

	Week ended Feb 21 Forecast	Week ended Feb 14 Actual	Year ago Feb 21	Five-year average Feb 21
U.S. weekly natgas storage change (bcf):	-248	-196	-86	-141
U.S. total natgas in storage (bcf):	1,853	2,101	2,401	2,078
U.S. total storage versus 5-year average	-10.8%	-5.3%


Global Gas Benchmark Futures ($ per mmBtu)	Current Day	Prior Day	This Month Last Year	Prior Year Average 2024	Five-Year Average (2019-2023)
Henry Hub NGc1	3.96	4.23	1.80	2.41	3.52
Title Transfer Facility (TTF) TRNLTTFMc1	14.05	14.12	8.12	10.95	15.47
Japan Korea Marker (JKM) JKMc1	14.18	14.25	8.93	11.89	15.23


LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days
Two-Week Total Forecast	Current Day	Prior Day	Prior Year	10-Year Norm	30-Year Norm
U.S. GFS HDDs	297	376	256	344	342
U.S. GFS CDDs	6	6	13	10	8
U.S. GFS TDDs	303	382	259	354	350

LSEG U.S. Weekly GFS Supply and Demand Forecasts
	Prior Week	Current Week	Next Week	This Week Last Year	Five-Year (2020-2024)Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production	103.0	102.7	102.4	103.2	95.8
U.S. Imports from Canada	11.1	9.5	8.6	N/A	8.0
U.S. LNG Imports	0.0	0.0	0.0	0.0	0.2
Total U.S. Supply	114.1	112.3	111.0	N/A	104.0

U.S. Demand (bcfd)
U.S. Exports to Canada	2.5	3.3	2.8	N/A	2.9
U.S. Exports to Mexico	5.3	5.3	5.7	N/A	5.0
U.S. LNG Exports	20.7	14.4	14.6	14.0	11.3
U.S. Commercial	14.6	14.6	13.5	12.9	15.9
U.S. Residential	35.4	23.4	21.2	20.0	26.4
U.S. Power Plant	34.3	33.0	28.4	30.6	30.0
U.S. Industrial	27.0	24.9	24.5	24.5	25.1
U.S. Plant Fuel	5.1	5.1	5.1	5.1	5.1
U.S. Pipe Distribution	3.3	2.8	2.5	2.8	4.0
U.S. Vehicle Fuel	0.1	0.1	0.1	0.1	0.2
Total U.S. Consumption	125.9	103.9	95.3	96.0	106.7
Total U.S. Demand	148.0	127.0	118.3	N/A	125.9

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)	2025 Current Day % of Normal Forecast	2025 Prior Day % of Normal Forecast	2024 % of Normal Actual	2023 % of Normal Actual	2022 % of Normal Actual
Apr-Sep	87	86	74	83	107
Jan-Jul	85	84	76	77	102
Oct-Sep	86	85	77	76	103


U.S. weekly power generation percent by fuel - EIA
	Week ended Feb 28	Week ended Feb 21	2024	2023	2022
Wind	11	11	11	10	11
Solar	5	4	5	4	3
Hydro	6	6	6	6	6
Other	1	1	1	2	2
Petroleum	0	0	0	0	0
Natural Gas	37	39	42	41	38
Coal	20	22	16	17	21
Nuclear	19	17	19	19	19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub	Current Day	Prior Day
Henry Hub NG-W-HH-SNL	4.43	5.62
Transco Z6 New York NG-CG-NY-SNL	4.35	6.07
PG&E Citygate NG-CG-PGE-SNL	3.82	3.90
Eastern Gas (old Dominion South) NG-PCN-APP-SNL	3.96	6.59
Chicago Citygate NG-CG-CH-SNL	4.17	6.14
Algonquin Citygate NG-CG-BS-SNL	11.48	16.05
SoCal Citygate NG-SCL-CGT-SNL	4.22	4.47
Waha Hub NG-WAH-WTX-SNL	2.60	4.30
AECO NG-ASH-ALB-SNL	1.25	1.37

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day
New England E-NEPLMHP-IDX		142.20
PJM West E-PJWHDAP-IDX	46.56	75.40
Mid C W-MIDCP-IDX	27.69	46.29
Palo Verde W-PVP-IDX	18.06	24.38
SP-15 W-SP15-IDX	19.02	21.95

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

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C

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