US natural gas prices down over 1% on rising output, mild weather outlook

Reuters
11 Mar
US natural gas prices down over 1% on rising output, mild weather outlook

Rising output, mild weather offset higher demand outlook

Record flows to LNG export facilities continue

Canadian gas exports to US drop after tariffs

March 11 (Reuters) - U.S. natural gas prices slipped more than 1% on Tuesday, as rising output and forecasts for milder weather offset a higher demand outlook for next week and record flows to liquefied natural gas $(LNG)$ export facilities.

Front-month gas futures NGc1 for April delivery on the New York Mercantile Exchange were down 5.7 cents, or 1.3%, at $4.433 per million British thermal units (mmBtu) as of 9:58 a.m. EDT (1358 GMT). Prices rose to their highest level since December 2022 on Monday.

"With the weather factor diminishing in importance with near-record temperatures expected across some key consuming regions this week, further downward adjustment in HDD (heating degree days) accumulation would normally be pressing values lower," energy advisory firm Ritterbusch and Associates said in a note.

Financial firm LSEG estimated 213 heating degree days over the next two weeks in the Lower 48 U.S. states, down from the 221 HDDs estimated on Monday. The normal level is 278 HDDs for this time of year. Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through March 15.

LSEG said average gas output in the Lower 48 U.S. states has risen to 105.7 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.

However, LSEG forecast average gas demand in the Lower 48 states, including exports, will rise from 110.4 bcfd this week to 113.3 bcfd next week. Forecasts for next week were higher compared to LSEG's outlook on Monday.

Dutch and British wholesale gas prices rose on Tuesday amid lower Norwegian exports to Europe and higher demand. NG/EU

Gas prices rose more than 14% last week on record flows to LNG plants and worries Canada would reduce power and gas exports to the U.S. after U.S. President Donald Trump imposed tariffs on Canada and Mexico on March 4. Trump later said the two trading partners would not have to pay tariffs until early April on any goods that fell under the United States-Mexico-Canada Agreement.

In 2024, Canada supplied about 8% of total U.S. gas demand, including exports, and about 1% of total U.S. power demand, again including exports. Some of those power and gas exports returned to Canada.

In the import market, Canadian gas exports to the U.S. have dropped to an average of 8.8 bcfd over the past few days since Trump's tariffs were imposed, down from an average of 9.8 bcfd during the prior 11-day period from February 21 to March 3, according to LSEG data.

That compares with an average of 8.6 bcfd of Canadian gas exports to the U.S. in 2024 and 7.6 bcfd over the prior five years (2019-2023).

The amount of gas flowing to the eight big U.S. LNG export plants has risen to an average of 15.7 bcfd so far in March, up from a record 15.6 bcfd in February, as new units at Venture Global's VG.N 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana enter service.

"We continue to expect 2026 Henry Hub prices to remain above $4/mmBtu to incentivize drilling increases in the Haynesville region, the current source of marginal U.S. dry gas production growth, to help keep storage comfortable in the 2026/27 winter as U.S. LNG exports continue to move higher," Goldman Sachs said in a note.

Week ended Feb 28 Actual

Week ended Feb 21 Actual

Year ago Feb 28

Five-year average

Feb 28

U.S. weekly natgas storage change (bcf):

-80

-261

-56

-94

U.S. total natgas in storage (bcf):

1,760

1,840

2,345

1,984

U.S. total storage versus 5-year average

-11.3%

-11.5%

Global Gas Benchmark Futures ($ per mmBtu)

Current Day

Prior Day

This Month Last Year

Prior Year Average 2024

Five-Year Average (2019-2023)

Henry Hub NGc1

4.54

4.40

1.75

2.41

3.52

Title Transfer Facility (TTF) TRNLTTFMc1

-

12.87

8.54

10.95

15.47

Japan Korea Marker (JKM) JKMc1

13.76

13.76

8.95

11.89

15.23

LSEG Heating $(HDD.UK)$, Cooling $(CDD.AU)$ 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

213

221

239

266

278

U.S. GFS CDDs

13

12

10

17

13

U.S. GFS TDDs

226

233

249

283

291

LSEG U.S. Weekly GFS Supply and Demand Forecasts

Prior Week

Current Week

Next Week

This Week Last Year

Five-Year (2020-2024)Average For Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production

106.1

105.6

105.3

-

97.5

U.S. Imports from Canada

9.2

9.1

8.9

N/A

7.8

U.S. LNG Imports

0.0

0.0

0.0

-

0.1

Total U.S. Supply

115.3

114.7

114.2

N/A

105.4

U.S. Demand (bcfd)

U.S. Exports to Canada

3.8

3.7

3.6

N/A

3.3

U.S. Exports to Mexico

6.3

6.1

6.3

N/A

5.4

U.S. LNG Exports

15.6

15.6

15.3

-

11.8

U.S. Commercial

13.7

11.2

12.0

-

11.8

U.S. Residential

21.6

17.2

18.6

-

18.3

U.S. Power Plant

26.4

25.4

25.3

-

27.5

U.S. Industrial

24.6

23.7

24.5

-

23.8

U.S. Plant Fuel

5.2

5.2

5.2

-

5.2

U.S. Pipe Distribution

2.5

2.3

2.3

-

3.3

U.S. Vehicle Fuel

0.1

0.1

0.1

-

0.2

Total U.S. Consumption

94.1

85.0

88.1

-

90.1

Total U.S. Demand

119.8

110.4

113.3

N/A

110.6

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)

2025 Current Day

% of Normal Forecast

2025

Prior Day % of Normal Forecast

2024

% of Normal Actual

2023

% of Normal Actual

2022

% of Normal Actual

Apr-Sep

87

85

74

83

107

Jan-Jul

85

84

76

77

102

Oct-Sep

86

85

77

76

103

U.S. weekly power generation percent by fuel - EIA

Week ended March 14

Week ended March 7

2024

2023

2022

Wind

15

14

11

10

11

Solar

6

6

5

4

3

Hydro

7

7

6

6

6

Other

1

1

1

2

2

Petroleum

0

0

0

0

0

Natural Gas

33

35

42

41

38

Coal

18

17

16

17

21

Nuclear

20

20

19

19

19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

Hub

Current Day

Prior Day

Henry Hub NG-W-HH-SNL

4.58

4.23

Transco Z6 New York NG-CG-NY-SNL

3.76

3.85

PG&E Citygate NG-CG-PGE-SNL

4.11

3.82

Eastern Gas (old Dominion South) NG-PCN-APP-SNL

3.65

3.67

Chicago Citygate NG-CG-CH-SNL

3.85

3.84

Algonquin Citygate NG-CG-BS-SNL

3.97

4.62

SoCal Citygate NG-SCL-CGT-SNL

4.25

3.85

Waha Hub NG-WAH-WTX-SNL

1.36

1.3

AECO NG-ASH-ALB-SNL

2.17

-

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)

Hub

Current Day

New England E-NEPLMHP-IDX

42.38

-

PJM West E-PJWHDAP-IDX

42.06

48.95

Mid C W-MIDCP-IDX

57.19

40.74

Palo Verde W-PVP-IDX

39.09

31.80

SP-15 W-SP15-IDX

43.25

27.96

text_section_type="notes">For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminalFor graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.htmlFor next-day SNL U.S. gas prices, see: 0#SNL-NGFor next-day SNL U.S. power prices, see: 0#SNL-PWRFor U.S. natgas price and storage polls, see: NGAS/POLLFor U.S. nuclear power outages, see: NUKE/For U.S. Northwest hydro power report, see: NWRFCFor U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44For the U.S. natural gas speed guide, see: USGASFor the U.S. power speed guide, see: USPOWERTo 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#3CFTC023651NYMEX Henry Hub futures only 0#1CFTC023651ICE Henry Hub options and futures combined 0#3CFTC023391NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565BNYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C

(Reporting by Brijesh Patel and Anmol Choubey in Bengaluru; Editing by Paul Simao)

((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 9590227221; Reuters Messaging: Brijesh.Patel1.thomsonreuters.com@reuters.net/))

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