US natgas futures drop 1.5% on lower demand outlook and small storage withdrawal

By Scott DiSavino

NEW YORK, Dec 4 (Reuters) - U.S. natural gas futures slid by 1.5% on Thursday on a small weekly storage withdrawal, forecasts for less demand than previously expected over the next two weeks, ample amounts of gas in inventory and lower prices in Europe and Asia.

Front-month gas futures for January delivery NGc1 on the New York Mercantile Exchange fell 7.6 cents, or 1.5%, to $4.919 per million British thermal units (mmBtu).

Futures prices had hit a 35-month high in the previous session as extreme cold blanketing the country boosted heating demand and cash prices in several regions to their highest since last winter.

The U.S. Energy Information Administration (EIA) said energy companies pulled 12 billion cubic feet (bcf) of gas out of storage during the week ended November 28.

That was less than the 18 bcf withdrawal analysts forecast in a Reuters poll and compares with a decline of 26 bcf in the same week last year and an average withdrawal of 43 bcf for the comparable period over the past five years (2020-2024). EIA/GAS NGAS/POLL

Analysts said that Thursday could be the coldest day in December. Meteorologists expect temperatures to average about 0 degrees Celsius (32 degrees Fahrenheit).

In New England, extreme cold so far this week caused next-day gas NG-CG-BS-SNL prices to soar to $25 per mmBtu, their highest since February 2023. That compares with an average of about $5 so far this year and $4 over the previous five years (2020-2024).

Across the rest of North America, next-day gas prices jumped to their highest since February 2025 at the Henry Hub NG-W-HH-SNL benchmark in Louisiana, in Pennsylvania NG-PCN-APP-SNL, Chicago NG-CG-CH-SNL, New York NG-CG-NY-SNL and in Alberta NG-ASH-ALB-SNL in Canada.

SUPPLY AND DEMAND

Average gas output in the Lower 48 states has dropped to 109.4 billion cubic feet per day (bcfd) so far in December, down from a monthly record high of 109.6 bcfd in November, LSEG data shows.

On a daily basis, output was on track to drop by about 3.1 bcfd to a three-week low of 108.2 bcfd on Thursday. It hit a daily record high of 111.3 bcfd on November 28. Most of the declines were in Pennsylvania, Texas and West Virginia, LSEG data shows.

LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 144.5 bcfd this week to 142.6 bcfd next week. Those forecasts were lower than LSEG's outlook on Wednesday.

Average gas flows to the eight large liquefied natural gas (LNG) export plants operating in the U.S. have dropped to 18.0 bcfd so far this month, down from a monthly record high of 18.2 bcfd in November.

The U.S. became the world's biggest LNG producer 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.

Around the world, gas prices fell to a 19-month low of about $9 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 in Europe on hopes peace talks in Ukraine could result in the lifting of sanctions against Moscow. That could allow Russia, the world's second-biggest gas producer behind the U.S., to export more gas in the future. NG/EU

Elsewhere, prices at the Japan-Korea Marker (JKM) benchmark JKMc1 in Asia slid to a three-month low near $11 per mmBtu.