US natgas prices hit over one-week low on mild weather ahead of storage report

By Anmol Choubey

March 13 (Reuters) - U.S. natural gas futures fell to their lowest level in over a week on Thursday, on near record output and predictions of milder weather over the next two weeks, as investors awaited a federal report expected to show storage withdrawals last week were near normal for this time of year.

Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange were down 8.1 cents, or 2% lower at $4.00 per million British thermal units (mmBtu) as of 09:03 a.m. ET, after hitting their lowest level since March 3 earlier in the session. Prices fell over 8% in the previous session.

"It looks like we're trying to build a base of $4 as they're going to take a look at the inventory today... we're seeing some of the sell off is because the cold front that we saw is starting to ease," said Phil Flynn, an analyst at Price Futures Group.

Financial firm LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 111 bcfd this week to 106 bcfd next week.

Meanwhile, LSEG said average gas output in the Lower 48 U.S. states has risen to 105.7 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.

LSEG estimated there would be 205 heating degree days over the next two weeks in the Lower 48 U.S. states, up from the 198 HDDs estimated on Wednesday. The normal level is 258 HDDs for this time of year.

The U.S. Energy Information Administration is scheduled to release its weekly storage report later in the day.

Analysts projected utilities pulled 54 billion cubic feet (bcf) of gas out of storage during the week ended March 7. That compares with declines of 19 bcf during the same week last year and a five-year average draw of 56 bcf for this time of year. EIA/GAS NGAS/POLL

"We don't expect today's EIA storage report to prompt much price reaction unless the release varies by more than 10-12 bcf from average industry forecasts that concentrate within the 50-55 bcf zone regarding a withdrawal," energy advisory firm Ritterbusch and Associates said in a note.

Canada could impose non-tariff measures such as restricting its oil exports to the United States or levying export duties on products if a trade dispute with the U.S. escalates further, Canada's energy minister Jonathan Wilkinson said on Tuesday.

Canada in 2024 supplied about 8% of total U.S. gas demand, including exports, and about 1% of total U.S. power demand, again including exports. Some of those power and gas exports returned to Canada.

Canadian gas exports to the U.S. have dropped to an average of 8.7 bcfd since Trump's tariffs were announced, down from an average of 9.8 bcfd during the prior 11-day period from February 21 to March 3, according to LSEG data.

That compares with an average of 8.6 bcfd of Canadian gas exports to the U.S. in 2024 and 7.6 bcfd over the prior five years (2019-2023).

The amount of gas flowing to the eight big U.S. LNG export plants has risen to an average of 15.6 bcfd so far in March. This compares with a record 15.6 bcfd in February.

U.S. natural gas use is set to continue hitting record highs due to soaring liquefied natural gas (LNG) demand and power consumption from data centers, executives said at a conference this week, while also warning a lack of infrastructure could hurt the industry.

Meanwhile, Dutch and British wholesale gas prices rose as colder weather drives up gas demand for heating, while the market closely monitors developments on a potential ceasefire deal between Ukraine and Russia. 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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