US natgas prices slide 2% on output rise and expected, big storage build

Adds EIA storage report and latest prices

By Scott DiSavino

Nov 14 (Reuters) - U.S. natural gas futures slid about 2% on Thursday on an increase in daily output and a federal report showing utilities added more gas to storage than usual last week for a fourth week in a row, the first such consecutive run since October 2022.

That price decline came despite forecasts for colder weather and more heating demand over the next two weeks than previously expected and the increase in the amount of gas flowing to the country's liquefied natural gas $(LNG)$ export plants to a nine-month high.

Front-month gas futures NGc1 for December delivery on the New York Mercantile Exchange fell 6.7 cents, or 2.3%, to $2.916 per million British thermal units (mmBtu) at 10:40 a.m. EDT (1540 GMT). On Wednesday, the contract closed at its highest since June 12.

The U.S. Energy Information Administration $(EIA)$ said utilities added 42 billion cubic feet (bcf) of gas into storage during the week ended Nov. 8.

That was in line with the 44-bcf build analysts forecast in a Reuters poll and compares with an increase of 41 bcf in the same week last year and a five-year (2019-2023) average rise of 29 bcf for this time of year. EIA/GAS NGAS/POLL

Analysts said mild weather over the last month kept heating demand low, allowing utilities to inject more gas into storage than usual. The forecasters were so far uncertain whether utilities would add or pull gas during the week ended Nov. 15 since supply and demand were very close.

Prior to the last few weeks, however, injections had been smaller than usual for 14 straight weeks because many producers reduced drilling activities this year after average spot monthly prices at the U.S. Henry Hub NG-W-HH-SNL benchmark in Louisiana fell to a 32-year low for the month of March. Prices have remained relatively soft since then, dropping to a 23-year low in October.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states eased to 100.2 billion cubic feet per day (bcfd) so far in November, down from 101.3 bcfd in October. That compares with a record 105.3 bcfd in December 2023.

On a daily basis, however, output was on track to rise by about 2.0 bcfd over the last four days to a six-day high of 100.5 bcfd on Thursday, up from a nine-month low of 98.4 bcfd on Monday.

Meteorologists projected weather in the Lower 48 states will remain warmer than normal through Nov. 20 before turning mostly colder than normal from Nov. 21-29.

With seasonally colder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 108.3 bcfd this week to 109.8 bcfd next week. Those forecasts were higher than LSEG's outlook on Wednesday.

The amount of gas flowing to the seven big U.S. LNG export plants edged up to an average of 13.3 bcfd so far in November, up from 13.1 bcfd in October. That compares with a monthly record high of 14.7 bcfd in December 2023.

On a daily basis, LNG feedgas was on track to rise from 14.0 bcfd on Wednesday to a nine-month high of 14.4 bcfd on Thursday as flows to a few plants hit multi-week highs.

(Reporting by Scott DiSavino; Editing by Shreya Biswas and Barbara Lewis)

((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))

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For next-day SNL U.S. gas prices, see: 0#SNL-NG

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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

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