US natgas prices slide 3% on rising output, milder forecasts
March-April 'widow maker' futures spread trading in unusual contango
Spot prices at Waha Hub in West Texas rise to highest since January
Feedgas to LNG export plants drops to one-month low on Monday
By Scott DiSavino
Dec 10 (Reuters) -U.S. natural gas futures slid about 3% on Tuesday on rising output, forecasts for milder weather and lower heating demand than previously expected and a decline in the amount of gas flowing to liquefied natural gas (LNG) export plants to a one-month low.
Front-month gas futures NGc1 for January delivery on the New York Mercantile Exchange fell 8.6 cents, or 2.7%, to $3.096 per million British thermal units (mmBtu) at 8:14 a.m. EST (1314 GMT).
Some analysts 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.
In the spot market, the combination of new pipelines like the Matterhorn and cold weather in West Texas helped boost next-day gas prices at the Waha hub NG-WAH-WTX-SNL in the Permian shale, the nation's biggest oil-producing basin, to their highest since January.
New pipelines this year enabled Permian producers to move more gas that had been trapped by constrained pipes out of the basin. Those constraints caused gas prices at the Waha to fall into negative territory a record number of times this year.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 102.7 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. 25.
With warmer weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would drop from 128.6 bcfd this week to 121.3 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday.
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.
On a daily basis, LNG feedgas fell to a one-month low of 13.2 bcfd on Monday due mostly to a drop in flows to Cheniere Energy's LNG.N 4.5-bcfd Sabine Pass plant in Louisiana to a one-month low of 4.2 bcfd. That compares with average flows to Sabine of 4.8 bcfd over the past seven days.
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 | 3.12 | 3.18 | 2.54 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 13.83 | 13.92 | 11.55 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 15.06 | 15.08 | 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 | 332 | 355 | 319 | 382 | 406 |
U.S. GFS CDDs | 3 | 2 | 3 | 5 | 4 |
U.S. GFS TDDs | 335 | 357 | 322 | 387 | 410 |
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 | 102.4 | 105.6 | 97.8 |
U.S. Imports from Canada | 9.6 | 9.7 | 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 | 112.7 | 111.7 | 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 | 14.2 | 14.7 | 10.8 |
U.S. Commercial | 17.3 | 15.1 | 13.6 | 13.8 | 14.3 |
U.S. Residential | 28.9 | 24.8 | 22.2 | 22.3 | 23.4 |
U.S. Power Plant | 34.1 | 33.1 | 30.4 | 34.2 | 30.3 |
U.S. Industrial | 26.0 | 25.1 | 24.4 | 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 | 2.6 | 3.1 | 3.7 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 114.6 | 106.1 | 98.4 | 103.3 | 102.1 |
Total U.S. Demand | 137.2 | 128.6 | 121.3 | 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 | 89 | 89 | 74 | 83 | 107 |
Jan-Jul | 86 | 86 | 76 | 77 | 102 |
Oct-Sep | 86 | 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 | 3.05 | 2.83 | |||
Transco Z6 New York NG-CG-NY-SNL | 2.66 | 2.68 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.43 | 3.40 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 2.57 | 2.54 | |||
Chicago Citygate NG-CG-CH-SNL | 2.77 | 2.58 | |||
Algonquin Citygate NG-CG-BS-SNL | 3.41 | 6.92 | |||
SoCal Citygate NG-SCL-CGT-SNL | 3.70 | 3.47 | |||
Waha Hub NG-WAH-WTX-SNL | 2.82 | 2.19 | |||
AECO NG-ASH-ALB-SNL | 1.25 | 1.19 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 64.25 | 89.00 | |||
PJM West EL-PK-PJMW-SNL | 34.75 | 41.00 | |||
Ercot North EL-PK-ERTN-SNL | 29.50 | 42.75 | |||
Mid C EL-PK-MIDC-SNL | 57.75 | 53.71 | |||
Palo Verde EL-PK-PLVD-SNL | 40.00 | 31.75 | |||
SP-15 EL-PK-SP15-SNL | 39.50 | 30.75 |
Reporting by Scott DiSavino
Editing by Christina Fincher
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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