Mild weather forecasts reduce heating demand expectations
March-April spread shows traders not worried about gas storage
Waha Hub prices remain negative due to pipeline constraints
By Scott DiSavino
NEW YORK, Jan 9 (Reuters) - U.S. natural gas futures slid about 2% to an 11-week low on Friday on forecasts for mild weather and lower heating demand over the next two weeks than previously expected.
Front-month gas futures for February delivery NGc1 on the New York Mercantile Exchange fell 7.0 cents, or 2.1%, to $3.337 per million British thermal units.
That move put the contract down about 8% this week after falling about 17% last week.
In a sign that prices will drop when the March contract NGH26 becomes the front-month in late January, the premium of the front-month over the second-month NGc1-NGc2 rose to 70 cents per mmBtu, the most since December 2024.
Looking further ahead, the market is showing that traders are not worried about having enough gas in storage for the winter. The spread between futures for March over April 2026 NGH26-J26 was trading at a record deficit of around 4 cents per mmBtu. Analysts have said that April should not trade above March since demand for gas for heating is higher in March.
The industry calls the March-April spread the "widow-maker" because rapid price moves resulting from changing weather forecasts have forced some speculators out of business, including the Amaranth hedge fund, which lost more than $6 billion in 2006.
Traders use the March-April and October-November NGV26-X26 spreads to bet on winter weather forecasts and supply and demand. March is the last month of the winter heating season when utilities pull gas out of storage, and October is the last month of the summer cooling season when utilities inject gas into storage.
In the cash market, average prices at the Waha Hub NG-WAH-WTX-SNL in the Permian Shale in West Texas remained in negative territory for a second day in a row and the third time this year as pipeline constraints trapped gas in the nation's biggest oil-producing basin.
Waha prices have averaged a negative 66 cents per mmBtu so far this year, compared with $1.15 in all of 2025 and a five-year average (2021-2025) of $2.88.
Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, a record 49 times in 2024, and 39 times in 2025.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 states has fallen to 109.2 billion cubic feet per day (bcfd) so far in January, down from a monthly record high of 109.7 bcfd in December.
Despite colder-than-normal forecasts for January 18-19, meteorologists projected weather across the country would remain mostly warmer than normal through January 24, keeping the amount of gas needed to heat homes and businesses lower than usual for this time of year.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 131.9 bcfd this week to 133.1 bcfd next week and 143.6 bcfd in two weeks. The forecast for next week was lower than LSEG's outlook on Thursday.
Average gas flows to the eight large U.S. LNG export plants have held around 18.5 bcfd so far in January, the same as December's monthly record-high average.
Week ended Jan 9 Forecast | Week ended Jan 2 Actual | Year ago Jan 9 | Five-year average (2021-2025) Jan 9 | ||
U.S. weekly natgas storage change (bcf): | -90 | -119 | -227 | -146 | |
U.S. total natgas in storage (bcf): | 3,166 | 3,256 | 3,152 | 3,079 | |
U.S. total storage versus 5-year average | +2.8% | +1.0% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2025 | Five-Year Average (2021-2025) |
Henry Hub NGc1 | 3.43 | 3.41 | 3.72 | 3.62 | 3.79 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 9.50 | 9.48 | 14.67 | 11.94 | 18.51 |
Japan-Korea Marker (JKM) JKMc1 | 9.56 | 9.61 | 14.16 | 12.24 | 18.12 |
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) | 413 | 411 | 506 | 442 | 461 |
U.S. GFS Cooling Degree Days (CDD) | 4 | 4 | 0 | 3 | 3 |
U.S. GFS Total Degree Days (TDD) | 417 | 415 | 506 | 445 | 464 |
LSEG U.S. Weekly GFS Supply and Demand Forecasts | |||||
Prior Week | Current Week | Next Week | This Week Last Year | Five-Year (2021-2025) Average for Month | |
U.S. Supply (bcfd) | |||||
U.S. Lower 48 Dry Production | 109.9 | 109.2 | 109.2 | 102.5 | 98.6 |
U.S. Imports from Canada | 10.6 | 10.2 | 9.4 | N/A | 9.6 |
U.S. LNG Imports | 0.1 | 0.1 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 120.5 | 119.6 | 118.6 | N/A | 108.3 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 4.1 | 3.9 | 4.1 | N/A | 2.9 |
U.S. Exports to Mexico | 5.5 | 5.8 | 5.7 | N/A | 5.8 |
U.S. LNG Export Feedgas | 18.8 | 18.6 | 18.5 | 15.0 | 12.8 |
U.S. Commercial | 16.9 | 15.0 | 15.5 | 20.4 | 17.3 |
U.S. Residential | 28.1 | 24.3 | 25.5 | 35.0 | 29.9 |
U.S. Power Plant | 30.9 | 31.2 | 30.2 | 37.7 | 32.5 |
U.S. Industrial | 25.4 | 24.9 | 25.3 | 26.8 | 26.0 |
U.S. Plant Fuel | 5.4 | 5.4 | 5.4 | 5.4 | 5.2 |
U.S. Pipe Distribution | 2.9 | 2.8 | 2.8 | 2.9 | 4.4 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
Total U.S. Consumption | 109.7 | 103.6 | 104.9 | 128.3 | 115.5 |
Total U.S. Demand | 138.1 | 131.9 | 133.1 | N/A | 137.0 |
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 | 99 | 76 | 74 | 83 |
Jan-Jul | 101 | 100 | 78 | 76 | 77 |
Oct-Sep | 104 | 105 | 80 | 77 | 76 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jan 9 | Week ended Jan 2 | 2025 | 2024 | 2023 | |
Wind | 12 | 13 | 11 | 11 | 10 |
Solar | 4 | 4 | 6 | 5 | 4 |
Hydro | 7 | 7 | 6 | 6 | 6 |
Other | 1 | 1 | 1 | 1 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
36 | 36 | 40 | 42 | 41 | |
Coal | 18 | 18 | 18 | 16 | 17 |
Nuclear | 21 | 21 | 18 | 19 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | This Month Last Year | Prior Year Average 2025 | Five-Year Average (2021-2025) |
Henry Hub NG-W-HH-SNL | 2.92 | 3.10 | 4.13 | 3.52 | 3.72 |
Transco Z6 New York NG-CG-NY-SNL | 2.26 | 2.58 | 8.77 | 3.53 | 3.56 |
PG&E Citygate NG-CG-PGE-SNL | 2.52 | 2.57 | 3.87 | 3.42 | 5.47 |
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 2.20 | 2.52 | 3.74 | 2.79 | 2.96 |
Chicago Citygate NG-CG-CH-SNL | 2.60 | 2.69 | 3.93 | 3.23 | 3.60 |
Algonquin Citygate NG-CG-BS-SNL | 4.53 | 5.79 | 15.67 | 6.08 | 5.04 |
SoCal Citygate NG-SCL-CGT-SNL | 3.32 | 3.38 | 4.49 | 3.60 | 5.71 |
Waha Hub NG-WAH-WTX-SNL | -0.43 | -0.37 | 3.27 | 1.15 | 2.88 |
AECO NG-ASH-ALB-SNL | 1.66 | 1.65 | 1.22 | 1.13 | 2.13 |
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | This Month Last Year | Prior Year Average 2025 | Five-Year Average (2021-2025) |
New England E-NEPLMHP-IDX | 65.86 | 71.93 | 147.88 | 77.61 | 61.79 |
PJM West E-PJWHRTP-IX | 30.73 | 33.48 | 75.11 | 60.23 | 54.47 |
Mid C W-MIDCP-IDX | 20.08 | 18.74 | 52.79 | 44.81 | 68.96 |
Palo Verde W-PVP-IDX | 21.25 | 21.67 | 44.47 | 34.82 | 59.94 |
SP-15 W-SP15-IDX | 21.90 | 21.94 | 39.98 | 28.44 | 53.02 |
(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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