US natgas prices climb 4% to one-week high on colder forecasts, rising LNG feedgas
U.S. January futures premium over February near record high
U.S. March-April 'widow maker' futures spread remains in unusual contango
U.S. gas futures prices may have peaked in November
By Scott DiSavino
Dec 11 (Reuters) -U.S. natural gas futures climbed about 4% to a one-week high on Wednesday on forecasts for colder weather and higher heating demand than previously expected and an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants.
Front-month gas futures NGc1 for January delivery on the New York Mercantile Exchange rose 11.9 cents, or 3.8%, to $3.282 per million British thermal units (mmBtu) at 8:06 a.m. EST (1306 GMT), putting the contract on track for its highest close since Nov. 29.
That increase in the front-month boosted the premium of futures for January over February NGF25-G25 to 20.8 cents per mmBtu, its highest since hitting a record closing high of 21.0 cents in December 2022.
Some analysts, however, have said that winter, and the high prices it usually brings, could be over before the season officially starts now that the heavily traded March-April "widow maker" spread is trading in unusual contango. That means the April contract is priced higher than the March contract.
March is the last month of the winter storage withdrawal season, and April is the first month of the summer storage injection season. Because gas is primarily a winter heating fuel, summer prices typically do not trade above winter ones.
It is possible that gas prices hit their 2024 peak in November when they reached $3.56 per mmBtu. Over the past five years, prices hit their yearly highs in January 2023, August 2022, October 2021 and 2020, and January 2019.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 102.8 billion cubic feet per day (bcfd) so far in December, up from 101.5 bcfd in November. That compares with a record 105.3 bcfd in December 2023.
Meteorologists projected the weather in the Lower 48 states would remain mostly warmer than normal through Dec. 26.
With warmer weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would drop from 128.8 bcfd this week to 123.0 bcfd next week. The forecasts for next week was higher than LSEG's outlook on Tuesday.
The amount of gas flowing to the seven big operating U.S. LNG export plants rose to an average of 14.0 bcfd so far in December, up from 13.6 bcfd in November. That compares with a monthly record high of 14.7 bcfd in December 2023.
The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices feed demand for more exports due in part to supply disruptions and sanctions linked to Russia's invasion of Ukraine in February 2022.
Gas prices were trading around $14 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and near an 11-month high of $15 at the Japan-Korea Marker (JKM) JKMc1 benchmark in Asia. NG/EU
Week ended Dec 6 Forecast | Week ended Nov 29 Actual | Year ago Dec 6 | Five-year average Dec 6 | ||
U.S. weekly natgas storage change (bcf): | -138 | -30 | -72 | -71 | |
U.S. total natgas in storage (bcf): | 3,799 | 3,937 | 3,680 | 3,582 | |
U.S. total storage versus 5-year average | 6.1% | 7.8% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 3.25 | 3.16 | 2.54 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 13.74 | 14.05 | 11.55 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 15.02 | 15.06 | 14.03 | 14.39 | 14.31 |
LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days | |||||
Two-Week Total Forecast | Current Day | Prior Day | Prior Year | 10-Year Norm | 30-Year Norm |
U.S. GFS HDDs | 365 | 332 | 319 | 382 | 409 |
U.S. GFS CDDs | 3 | 3 | 3 | 5 | 4 |
U.S. GFS TDDs | 368 | 335 | 322 | 387 | 413 |
LSEG U.S. Weekly GFS Supply and Demand Forecasts | |||||
Prior Week | Current Week | Next Week | This Week Last Year | Five-Year (2019-2023) Average For Month | |
U.S. Supply (bcfd) | |||||
U.S. Lower 48 Dry Production | 102.6 | 103.0 | 102.5 | 105.6 | 97.8 |
U.S. Imports from Canada | 9.6 | 9.8 | 9.3 | N/A | 8.7 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.1 | 0.2 |
Total U.S. Supply | 112.2 | 112.8 | 111.9 | N/A | 106.7 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 2.7 | 3.1 | 3.0 | N/A | 3.4 |
U.S. Exports to Mexico | 5.6 | 5.7 | 5.7 | N/A | 5.4 |
U.S. LNG Exports | 14.2 | 13.8 | 14.3 | 14.7 | 10.8 |
U.S. Commercial | 17.3 | 15.2 | 14.2 | 13.8 | 14.3 |
U.S. Residential | 28.9 | 25.0 | 23.2 | 22.3 | 23.4 |
U.S. Power Plant | 34.1 | 32.8 | 30.3 | 34.2 | 30.3 |
U.S. Industrial | 26.0 | 25.1 | 24.6 | 24.7 | 25.1 |
U.S. Plant Fuel | 5.1 | 5.1 | 5.1 | 5.1 | 5.2 |
U.S. Pipe Distribution | 3.0 | 2.8 | 2.7 | 3.1 | 3.7 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 114.6 | 106.2 | 100.0 | 103.3 | 102.1 |
Total U.S. Demand | 137.2 | 128.8 | 123.0 | N/A | 121.7 |
N/A is Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam | 2025 Current Day % of Normal Forecast | 2025 Prior Day % of Normal Forecast | 2024 % of Normal Actual | 2003 % of Normal Actual | 2022 % of Normal Actual |
Apr-Sep | 90 | 89 | 74 | 83 | 107 |
Jan-Jul | 86 | 86 | 76 | 77 | 102 |
Oct-Sep | 87 | 86 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Dec 13 | Week ended Dec 6 | 2023 | 2022 | 2021 | |
Wind | 14 | 9 | 10 | 11 | 10 |
Solar | 3 | 4 | 4 | 3 | 3 |
Hydro | 5 | 5 | 6 | 6 | 7 |
Other | 1 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 38 | 42 | 41 | 38 | 37 |
Coal | 17 | 20 | 17 | 21 | 23 |
Nuclear | 21 | 19 | 19 | 19 | 20 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.90 | 3.05 | |||
Transco Z6 New York NG-CG-NY-SNL | 2.74 | 2.66 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.31 | 3.43 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 2.65 | 2.57 | |||
Chicago Citygate NG-CG-CH-SNL | 2.90 | 2.77 | |||
Algonquin Citygate NG-CG-BS-SNL | 3.24 | 3.41 | |||
SoCal Citygate NG-SCL-CGT-SNL | 3.62 | 3.70 | |||
Waha Hub NG-WAH-WTX-SNL | 2.74 | 2.82 | |||
AECO NG-ASH-ALB-SNL | 1.18 | 1.25 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 46.25 | 64.25 | |||
PJM West EL-PK-PJMW-SNL | 42.25 | 34.75 | |||
Ercot North EL-PK-ERTN-SNL | 27.00 | 29.50 | |||
Mid C EL-PK-MIDC-SNL | 55.00 | 57.75 | |||
Palo Verde EL-PK-PLVD-SNL | 39.00 | 40.00 | |||
SP-15 EL-PK-SP15-SNL | 47.50 | 39.50 |
Reporting by Scott DiSavino
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
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