US natural gas prices climb 2% on record flows to LNG export plants

By Scott DiSavino

March 3 (Reuters) - U.S. natural gas futures climbed about 2% on Monday on record flows to liquefied natural gas (LNG) export plants and forecasts for higher demand over the next two weeks than previously expected.

Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange were up 8.4 cents, or 2.2%, to $3.918 per million British thermal units (mmBtu) at 9:19 a.m. EST (1419 GMT). On Friday, the contract closed at its lowest level since February 14.

The price increase occurred despite record output and forecasts for the weather to remain mild through the middle of March, which should allow utilities to pull less gas out of storage in coming weeks.

Extreme cold weather earlier this year, however, has already forced energy firms to pull massive amounts of gas out of storage, including record amounts in January, cutting stockpiles to around 12% below the five-year (2020-2024) normal. EIA/GAS NGAS/POLL

With prices down about 9% last week, speculators cut their net long futures and options positions on the New York Mercantile Exchange and Intercontinental Exchange for the second time in 12 weeks, 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 has risen to 105.8 billion cubic feet per day (bcfd) so far in March, up from a record 104.7 bcfd in February.

Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through March 18.

With milder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 119.3 bcfd this week to 114.7 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.

The amount of gas flowing to the eight big U.S. LNG export plants has risen to an average of 15.8 bcfd so far in March, up from a record 15.6 bcfd in February, as new units at Venture Global's VG.N 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana enter service.

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 around $14 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

text_section_type="notes">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