US natgas prices hold at 10-week low on forecasts for mild weather through early May

By Scott DiSavino

April 17 (Reuters) - U.S. natural gas futures held at a 10-week low on Thursday ahead of the long Good Friday holiday weekend on forecasts for the weather to remain mild and demand low through early May.

Lack of price movement came despite a federal report showing a smaller than expected weekly storage build, a small decline in daily output and forecasts for more demand over the next two weeks than previously expected.

Gas futures NGc1 for May delivery on the New York Mercantile Exchange fell 0.2 cents, or 0.1%, to settle at $3.245 per million British thermal units, their lowest close since January 31 for a second day in a row.

That kept the front-month in technically oversold territory for a second day in a row for the first time since January.

The U.S. Energy Information Administration (EIA) said energy firms added 16 billion cubic feet of gas into storage during the week ended April 11.

Analysts said the storage build was smaller than usual as cool weather last week kept heating demand for the fuel higher than normal.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 106.3 billion cubic feet per day in April, up from a monthly record of 106.2 bcfd in March.

On a daily basis, however, output was on track to drop to a one-week low of 105.5 bcfd on Thursday as spring pipeline maintenance leaves some gas trapped in production basins, traders and analysts have said.

Looking ahead, analysts said energy firms could cut back on oil drilling in the coming weeks due to the roughly 12% drop in U.S. crude CLc1 futures in April.

The crude price drop was related in part to uncertainty tied to U.S. President Donald Trump's on-again off-again trade tariffs, which could reduce economic growth and oil demand. O/R

Any reduction in oil drilling in shale basins such as the Permian in Texas and New Mexico and the Bakken in North Dakota could boost gas prices by cutting gas output.

Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through May 2.

With seasonally milder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will fall from 105.2 bcfd this week to 98.6 bcfd next week. Those forecasts were higher than LSEG's outlook on Wednesday.

The average amount of gas flowing to the eight big LNG export plants operating in the U.S. climbed from a monthly record of 15.8 bcfd in March to 16.2 bcfd so far in April on rising flows to Venture Global's VG.N 3.2-bcfd Plaquemines export plant under construction in Louisiana.

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 in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.

Gas was trading at a one-week high of around $12 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and a 10-month low of around $12 at 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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