Colder weather expected to increase gas demand for heating
Record LNG flows boost US natural gas demand
Cash gas prices rise to highest levels since last winter on extreme cold
Global gas prices lower amid Russia-Ukraine peace talks
Record output, ample storage limit price gains
Adds latest prices
By Scott DiSavino
NEW YORK, Dec 3 (Reuters) - U.S. natural gas futures climbed about 3% on Wednesday to a 35-month high, on record flows to liquefied natural gas $(LNG)$ export plants and forecasts for colder weather and higher demand over the next two weeks than previously expected.
Limiting gains were record output, ample amounts of gas in storage and lower gas prices in Europe and Asia due mostly to the possibility that peace talks in Ukraine could result in the lifting of sanctions against Moscow. That could allow Russia, the world's second-biggest gas producer behind the U.S., to export more gas in the future.
Front-month gas futures for January delivery NGc1 on the New York Mercantile Exchange rose 15.5 cents, or 3.2%, to settle at $4.995 per million British thermal units (mmBtu), their highest close since December 27, 2022.
In intraday trade, the front-month briefly rose over the $5 per mmBtu psychological level of technical resistance. It also closed in overbought territory for the third time in four days.
Meteorologists forecast temperatures across the country will remain well below normal through December 9, with the most frigid weather expected on Thursday, before turning warmer than normal next week.
Extreme cold this week helped drive cash prices to their highest levels since January 2024 in New England NG-CG-BS-SNL and California NG-SCL-CGT-SNL, NG-CG-PGE-SNL and their highest levels since February at the Henry Hub benchmark NG-W-HH-SNL in Louisiana and in Pennsylvania NG-PCN-APP-SNL, Chicago NG-CG-CH-SNL and New York NG-CG-NY-SNL.
SUPPLY AND DEMAND
LSEG said average gas output in the Lower 48 states has risen to 109.7 billion cubic feet per day (bcfd) so far in December, up from a monthly record of 109.6 bcfd in November.
On a daily basis, however, output was on track to drop by 2.4 bcfd to a one-week low of 108.9 bcfd on Wednesday since hitting a daily record high of 111.3 bcfd on November 28.
Record output has allowed energy companies to stockpile more gas than usual, leaving about 5% more gas in storage than normal for this time of year. EIA/GAS NGAS/POLL
LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 145.1 bcfd this week to 142.9 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday.
Average gas flows to the eight big LNG export plants operating in the U.S. have risen to 18.4 bcfd so far in December, up from a monthly record high of 18.2 bcfd in November.
Freeport LNG's export plant in Texas was on track to take in more gas on Wednesday in a sign that one of the plant's three liquefaction trains has returned to service after shutting on Tuesday.
The U.S. became the world's biggest LNG producer in 2023, surpassing Australia and Qatar as surging global prices fed demand for more exports, due in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.
Around the world, gas prices held near an 18-month low of around $10 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 in Europe on hopes of a possible peace plan for Russia and Ukraine, while prices at the Japan-Korea Marker (JKM) JKMc1 in Asia slid to a three-month low near $11. NG/EU
Week ended Nov 28 Forecast | Week ended Nov 21 Actual | Year ago Nov 28 | Five-year average Nov 28 | ||
U.S. weekly natgas storage change (bcf): | -18 | -11 | -26 | -43 | |
U.S. total natgas in storage (bcf): | 3,917 | 3,935 | 3,941 | 3,732 | |
U.S. total storage versus 5-year average | +5.0% | +4.2% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
Henry Hub NGc1 | 4.97 | 4.84 | 3.41 | 2.41 | 3.52 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 9.60 | 9.54 | 13.83 | 10.95 | 15.47 |
Japan-Korea Marker (JKM) JKMc1 | 11.00 | 11.07 | 14.34 | 11.89 | 15.23 |
LSEG U.S. Global Forecast System $(GFS)$ Heating, Cooling and Total Degree Days | |||||
Two-Week Total Forecast | Current Day | Prior Day | Prior Year | 10-Year Norm | 30-Year Norm |
U.S. GFS Heating Degree Days (HDD) | 430 | 427 | 397 | 360 | 397 |
U.S. GFS Cooling Degree Days (CDD) | 5 | 5 | 3 | 6 | 4 |
U.S. GFS Total Degree Days (TDD) | 435 | 432 | 400 | 366 | 401 |
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 | 110.5 | 110.5 | 110.2 | 103.7 | 99.3 |
U.S. Imports from Canada | 8.8 | 9.8 | 9.2 | N/A | 8.9 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 119.2 | 120.3 | 119.5 | N/A | 108.3 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 3.2 | 3.0 | 3.0 | N/A | 3.3 |
U.S. Exports to Mexico | 6.1 | 6.2 | 6.1 | N/A | 5.4 |
U.S. LNG Export Feedgas | 18.6 | 18.7 | 18.3 | 14.2 | 12.8 |
U.S. Commercial | 12.1 | 17.6 | 17.7 | 17.5 | 14.9 |
U.S. Residential | 18.9 | 29.9 | 29.8 | 29.3 | 24.2 |
U.S. Power Plant | 31.4 | 34.9 | 33.3 | 36.3 | 33.6 |
U.S. Industrial | 24.3 | 26.2 | 26.0 | 26.2 | 25.2 |
U.S. Plant Fuel | 5.5 | 5.5 | 5.4 | 5.5 | 5.7 |
U.S. Pipe Distribution | 2.5 | 3.1 | 3.1 | 2.5 | 4.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
Total U.S. Consumption | 94.8 | 117.2 | 115.5 | 117.4 | 108.0 |
Total U.S. Demand | 122.8 | 145.1 | 142.9 | N/A | 129.5 |
N/A = Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30) | 2026 Current Day % of Normal Forecast | 2026 Prior Day % of Normal Forecast | 2025 % of Normal Actual | 2024 % of Normal Actual | 2023 % of Normal Actual |
Apr-Sep | 90 | 90 | 76 | 74 | 83 |
Jan-Jul | 88 | 88 | 78 | 76 | 77 |
Oct-Sep | 89 | 89 | 80 | 77 | 76 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Dec 5 | Week ended Nov 28 | 2024 | 2023 | 2022 | |
Wind | 12 | 11 | 11 | 10 | 11 |
Solar | 4 | 5 | 5 | 4 | 3 |
Hydro | 5 | 5 | 6 | 6 | 6 |
Other | 1 | 1 | 1 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
39 | 39 | 42 | 41 | 38 | |
Coal | 19 | 8 | 16 | 17 | 21 |
Nuclear | 20 | 21 | 19 | 19 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
Henry Hub | 4.83 | 5.08 | 3.02 | 2.19 | 3.49 |
Transco Z6 New York | 5.21 | 5.23 | 3.31 | 1.98 | 3.29 |
PG&E Citygate | 4.62 | 4.75 | 3.42 | 3.04 | 5.47 |
Eastern Gas (old Dominion South) | 4.28 | 4.33 | 2.70 | 1.68 | 2.77 |
Chicago Citygate | 4.49 | 4.45 | 2.82 | 2.00 | 3.41 |
Algonquin Citygate | 22.25 | 13.00 | 8.16 | 2.88 | 4.27 |
SoCal Citygate | 4.68 | 4.95 | 3.54 | 2.47 | 5.92 |
Waha Hub | 0.85 | 1.504 | 2.28 | 0.77 | 2.91 |
AECO | 2.19 | 2.19 | 1.26 | 0.96 | 2.28 |
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
New England | 149.57 | 124.28 | 85.01 | 47.35 | 48.44 |
PJM West | 74.76 | 80.39 | 43.03 | 41.98 | 45.33 |
Mid C | 54.95 | 46.96 | 42.33 | 63.89 | 61.73 |
Palo Verde | 47.76 | 36.00 | 32.02 | 39.50 | 62.42 |
SP-15 | 46.27 | 46.66 | 39.19 | 31.30 | 58.87 |
(Reporting by Scott DiSavino; Editing by Paul Simao and David Gregorio)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net/))
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