Analyst cites talk of 'a potential glut'
Number of heating days expected to be lower
Dutch and British gas prices rise on colder weather
By Noel John
Jan 2 (Reuters) - U.S. natural gas futures began the year on a weak note on Friday, weighed down by forecasts for warmer weather and expectations of slower demand growth.
Front-month gas futures for February delivery NGc1 on the New York Mercantile Exchange were 9.6 cents, or 2.6%, lower at $3.59 per million British thermal units. The contract posted a 1.5% gain in 2025, after rising over 44% in 2024.
"There were concerns that the La Nina was breaking down a little bit, leading to warmer temperatures. There's also some concern internationally of LNG supplies supposedly building faster than anticipated, talk of a potential glut in the making in the international market," said Phil Flynn, senior analyst for Price Futures Group.
"The market is going to try to stabilize at this point until we get further direction of what the weather is going to be."
WARMER THAN AVERAGE TEMPERATURES
Meteorologists forecast warmer than normal temperatures nationwide through January 16, with Heating Degree Days falling from 413 on Wednesday to 369 on Friday. HDDs measure energy demand to heat buildings.
"With each passing day of extended warmer than normal outlooks, this market has the potential of declining further with February futures potentially sliding back to the pre-Christmas lows of about $3.47," consultancy Ritterbusch & Associates said in a note.
Financial firm LSEG said average natural gas output in the lower 48 U.S. states climbed to 110 billion cubic feet per day in December, surpassing November's monthly record of 109.6 bcfd, while average gas flows to the eight large U.S. LNG export facilities climbed to 18.5 billion cubic feet per day (bcfd) in December, exceeding November's record of 18.2 bcfd.
LSEG also projected average gas demand in the lower 48 states, including exports, would largely be steady at 133.2 bcfd next week, but below its Wednesday's projection of 134.5 bcfd.
The U.S. Energy Information Administration on Wednesday said energy firms withdrew 38 billion cubic feet of gas out of storage during the week ended December 26. EIA/GAS
That was below the 50-bcf withdrawal analysts forecast in a Reuters poll and compares with a decline of 112 bcf during the same week last year and an average withdrawal of 120 bcf over the past five years (2020-2024).
Meanwhile, Dutch and British wholesale gas prices rose as cooler than usual temperatures for the time of year boosted gas demand for heating.NG/EU
Elsewhere, China received 22 shipments of liquefied natural gas last year from two export projects in Russia that are under sanctions from the United States and European Union, ship-tracking data showed.
Week ended Dec 26 Actual | Week ended Dec 19 Actual | Year ago Dec 26 | Five-year average Dec 26 | ||
U.S. weekly natgas storage change (bcf): | -38 | -166 | -112 | -120 | |
U.S. total natgas in storage (bcf): | 3,375 | 3,413 | 3,430 | 3,317 | |
U.S. total storage versus 5-year average | 1.6% | -0.7% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
Henry Hub NGc1 | 3.69 | 3.97 | 3.41 | 2.41 | 3.52 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 9.84 | 9.80 | 13.83 | 10.95 | 15.47 |
Japan-Korea Marker (JKM) JKMc1 | 9.61 | 9.57 | 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) | 369 | 413 | 438 | 385 | 398 |
U.S. GFS Cooling Degree Days (CDD) | 4 | 6 | 0 | 3 | 3 |
U.S. GFS Total Degree Days (TDD) | 373 | 419 | 438 | 388 | 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 | 111.1 | 109.2 | 109.4 | N/A | 99.3 |
U.S. Imports from Canada | 9.9 | 9.0 | 8.9 | N/A | 8.9 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | N/A | 0.1 |
Total U.S. Supply | 121.0 | 118.2 | 118.3 | N/A | 108.3 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 4.2 | 3.6 | 3.6 | N/A | 3.3 |
U.S. Exports to Mexico | 5.6 | 5.7 | 5.7 | N/A | 5.4 |
U.S. LNG Export Feedgas | 18.1 | 18.4 | 18.0 | N/A | 12.8 |
U.S. Commercial | 14.1 | 15.4 | 15.5 | N/A | 14.9 |
U.S. Residential | 22.4 | 25.3 | 25.8 | N/A | 24.2 |
U.S. Power Plant | 29.4 | 31.7 | 31.1 | N/A | 33.6 |
U.S. Industrial | 24.7 | 25.0 | 25.1 | N/A | 25.2 |
U.S. Plant Fuel | 5.5 | 5.4 | 5.4 | N/A | 5.7 |
U.S. Pipe Distribution | 2.6 | 2.8 | 2.8 | N/A | 4.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | N/A | 0.2 |
Total U.S. Consumption | 98.9 | 105.8 | 105.9 | N/A | 108.0 |
Total U.S. Demand | 126.8 | 133.4 | 133.2 | 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 | - | 99 | 76 | 74 | 83 |
Jan-Jul | - | 98 | 78 | 76 | 77 |
Oct-Sep | - | 102 | 80 | 77 | 76 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jan 02 | Week ended Dec 26 | 2024 | 2023 | 2022 | |
Wind | 14 | 15 | 11 | 10 | 11 |
Solar | 4 | 4 | 5 | 4 | 3 |
Hydro | 7 | 7 | 6 | 6 | 6 |
Other | 1 | 1 | 1 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
36 | 34 | 42 | 41 | 38 | |
Coal | 17 | 17 | 16 | 17 | 21 |
Nuclear | 21 | 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 NG-W-HH-SNL | 4.00 | 4.40 | 3.02 | 2.19 | 3.49 |
Transco Z6 New York NG-CG-NY-SNL | 4.28 | 4.55 | 3.31 | 1.98 | 3.29 |
PG&E Citygate NG-CG-PGE-SNL | 2.98 | 3.02 | 3.42 | 3.04 | 5.47 |
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 3.67 | 3.67 | 2.70 | 1.68 | 2.77 |
Chicago Citygate NG-CG-CH-SNL | 3.08 | 3.75 | 2.82 | 2.00 | 3.41 |
Algonquin Citygate NG-CG-BS-SNL | 18.9 | 16.75 | 8.16 | 2.88 | 4.27 |
SoCal Citygate NG-SCL-CGT-SNL | 3.63 | 3.61 | 3.54 | 2.47 | 5.92 |
Waha Hub NG-WAH-WTX-SNL | 0.39 | 0.72 | 2.28 | 0.77 | 2.91 |
AECO NG-ASH-ALB-SNL | 2.53 | 2.56 | 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 E-NEPLMHP-IDX | - | 142.93 | 85.01 | 47.35 | 48.44 |
PJM West E-PJWHRTP-IX | 62.91 | 56.21 | 43.03 | 41.98 | 45.33 |
Mid C W-MIDCP-IDX | 26.58 | 31.13 | 42.33 | 63.89 | 61.73 |
Palo Verde W-PVP-IDX | 26.67 | 28.33 | 32.02 | 39.50 | 62.42 |
SP-15 W-SP15-IDX | 34.38 | 38.99 | 39.19 | 31.30 | 58.87 |
(Reporting by Noel John in Bengaluru; editing by Barbara Lewis)
((Noel.John@thomsonreuters.com;))
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