US natgas prices jump 8% to 1-week high in light trade ahead of contract expiration

By Scott DiSavino

April 28 (Reuters) - U.S. natural gas futures jumped about 8% to a one-week high on Monday on lifted demand forecasts, and some traders cited short-covering in light trade ahead of the front-month contract's expiration.

Earlier, prices slid about 2% to a five-month low on rising output and forecasts for mild weather through mid-May that will limit heating and cooling demand, allowing utilities to keep putting more gas than usual into storage.

On its last day as the front month, gas futures NGc1 for May delivery on the New York Mercantile Exchange (NYMEX) rose 23.3 cents, or 7.9%, to settle at $3.17 per million British thermal units, their highest close since April 17.

Traders said the low number of front-month contracts traded added price volatility. Just around 2,200 front-month contracts traded on the NYMEX on Monday, down from around 159,000 front-month contracts traded on average over the past year.

The June MGM25 contract, which will soon be the front month, jumped about 7.5% to $3.35 per mmBtu.

The front-month lost about 33% over the past seven weeks, a time of fast growth in the amount of gas in storage. In mid-January, gas inventories fell below normal levels, and analysts project they will rise above the five-year average in the next week or two.

After cold weather in January and February boosted demand for gas, the total amount in storage was about 1% below normal for this time of year. EIA/GAS NGAS/POLL

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 106.5 billion cubic feet per day in April from a monthly record of 106.2 bcfd in March.

Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer through May 13.

LSEG forecast average gas demand in the Lower 48, including exports, will slide from 99.2 bcfd this week to 97.4 bcfd next week. The forecast for this week was higher than LSEG's outlook on Friday, while its forecast for next week was lower.

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 16.0 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 near a nine-month low of around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and at an 11-month low of around $11 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

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