Winter storms knock out power to 366,000 US homes and businesses
Freezing wells and pipes reduce gas output
US LNG feedgas on track for monthly record high
By Scott DiSavino
Jan 6 (Reuters) - U.S. natural gas futures soared 9% in volatile trade on Monday as winter storms battered the eastern half of the country, causing output to decline as some oil and gas wells and pipes start to freeze.
So far, those storms have knocked out power to more than 366,000 homes and businesses from Missouri to Virginia.
Energy traders also noted that gas prices were gaining support from near-record gas flows to U.S. liquefied natural gas $(LNG)$ export plants and forecasts for colder weather and higher heating demand over the next two weeks than previously expected.
Front-month gas futures NGc1 for February delivery on the New York Mercantile Exchange were up 31.4 cents, or 9.4%, to $3.668 per million British thermal units (mmBtu) at 9:20 a.m. EST (1420 GMT). On Friday, the contract dropped by about 8% to close at its lowest price since Dec. 17.
With big price swings in recent weeks, Monday's gain was only the biggest daily percentage increase since prices jumped by 12.0% on Dec. 30.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states has risen to 105.0 billion cubic feet per day (bcfd) so far in January, up from 103.8 bcfd in December. That compares with a record 105.3 bcfd in December 2023.
But since output hit a 10-month high of 106.0 bcfd on Dec. 30, supplies were on track to drop by around 3.4 bcfd to a preliminary six-week low of 102.6 bcfd on Monday due mostly to freezing wells and pipes, known in the energy industry as freeze-offs.
Those output declines from freeze-offs so far this winter were much smaller than in recent years. But with the coldest weather still to come, analysts have said that output declines from freeze-offs should grow in the coming days.
In past winters, freeze-offs slashed gas output by around 16.5 bcfd from Jan. 8-16 in 2024, 19.4 bcfd from Dec. 21-24 in 2022 and 20.4 bcfd from Feb. 8-17 in 2021, according to LSEG data.
Meteorologists projected weather in the Lower 48 states would remain mostly colder than normal through Jan. 21 with the coldest days expected later this week.
LSEG forecast average gas demand in the Lower 48, including exports, would ease from 147.0 bcfd this week to 146.7 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.
On a daily basis, LSEG projected total gas use could reach 155.5 bcfd on Jan. 7, falling well short of the daily record of 168.4 bcfd on Jan. 16, 2024 during another brutal winter freeze.
The amount of gas flowing to the eight big U.S. LNG export plants has risen to an average of 15.1 bcfd so far in January, up from 14.4 bcfd in December. 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 was trading around $15 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and $14 at the Japan Korea Marker (JKM) benchmark in Asia JKMc1. NG/EU
Week ended Jan 3 Forecast | Week ended Dec 27 Actual | Year ago Jan 3 | Five-year average Jan 3 | ||
U.S. weekly natgas storage change (bcf): | -77 | -116 | -140 | -67 | |
U.S. total natgas in storage (bcf): | 3,336 | 3,413 | 3,340 | 3,192 | |
U.S. total storage versus 5-year average | 4.5% | 4.7% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
Henry Hub NGc1 | 3.65 | 3.35 | 2.72 | 2.41 | 3.52 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 14.66 | 14.98 | 9.55 | 10.95 | 15.47 |
Japan Korea Marker (JKM) JKMc1 | 14.36 | 14.38 | 10.32 | 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 | 510 | 495 | 512 | 442 | 445 |
U.S. GFS CDDs | 1 | 0 | 1 | 3 | 3 |
U.S. GFS TDDs | 511 | 495 | 513 | 445 | 448 |
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 | 105.6 | 103.6 | 103.4 | 105.5 | 96.7 |
U.S. Imports from Canada | 9.4 | 10.1 | 9.3 | N/A | 9.1 |
U.S. LNG Imports | 0.1 | 0.0 | 0.0 | 0.0 | 0.2 |
Total U.S. Supply | 114.9 | 113.7 | 112.7 | N/A | 106.0 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 3.8 | 2.7 | 2.8 | N/A | 3.0 |
U.S. Exports to Mexico | 5.0 | 5.3 | 5.5 | N/A | 5.6 |
U.S. LNG Exports | 14.3 | 14.5 | 14.7 | 14.7 | 11.6 |
U.S. Commercial | 13.5 | 20.2 | 19.8 | 16.5 | 16.4 |
U.S. Residential | 21.6 | 34.6 | 34.2 | 27.6 | 28.4 |
U.S. Power Plant | 28.2 | 34.0 | 34.4 | 38.1 | 31.4 |
U.S. Industrial | 24.5 | 26.9 | 26.8 | 25.9 | 25.7 |
U.S. Plant Fuel | 5.2 | 5.1 | 5.1 | 5.2 | 5.2 |
U.S. Pipe Distribution | 2.5 | 3.3 | 3.3 | 2.6 | 4.1 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
Total U.S. Consumption | 95.8 | 124.3 | 123.7 | 116.0 | 111.4 |
Total U.S. Demand | 118.9 | 147.0 | 146.7 | N/A | 131.6 |
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 | 90 | 92 | 74 | 83 | 107 |
Jan-Jul | 89 | 90 | 76 | 77 | 102 |
Oct-Sep | 91 | 92 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jan 10 | Week ended Jan 3 | 2024 | 2023 | 2022 | |
Wind | 12 | 13 | 11 | 10 | 11 |
Solar | 3 | 4 | 5 | 4 | 3 |
Hydro | 5 | 7 | 6 | 6 | 6 |
Other | 1 | 1 | 2 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 36 | 36 | 42 | 41 | 38 |
Coal | 22 | 18 | 16 | 17 | 21 |
Nuclear | 21 | 22 | 19 | 19 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 3.40 | 3.65 | |||
Transco Z6 New York NG-CG-NY-SNL | 4.30 | 3.70 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.24 | 3.29 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 3.00 | 3.25 | |||
Chicago Citygate NG-CG-CH-SNL | 3.33 | 3.34 | |||
Algonquin Citygate NG-CG-BS-SNL | 13.75 | 9.61 | |||
SoCal Citygate NG-SCL-CGT-SNL | 3.82 | 3.77 | |||
Waha Hub NG-WAH-WTX-SNL | 2.69 | 2.06 | |||
AECO NG-ASH-ALB-SNL | 1.20 | 1.24 | |||
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England E-NEPLMHP-IDX | 128.50 | 83.39 | |||
PJM West E-PJWHDAP-IDX | 56.92 | 40.58 | |||
Mid C W-MIDCP-IDX | 39.08 | 37.86 | |||
Palo Verde W-PVP-IDX | 34.88 | 29.05 | |||
SP-15 W-SP15-IDX | 40.00 | 37.75 |
text_section_type="notes">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 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 Scott DiSavino; Editing by Paul Simao)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net/))
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