Credit: REUTERS/Nick OxfordAdds latest prices
March 9 (Reuters) - U.S. natural gas futures were little changed on Wednesday as forecasts for more U.S. heating demand next week slowed the U.S. market following a massive drop in global gas and oil prices.
European gas futures TRNLTTFMc1 plunged 30% on Wednesday as supplies stabilized with high flows from Russia and massive liquefied natural gas (LNG) imports. That prompted traders to take profits after prices soared to record highs over $106 per million British thermal units (mmBtu) earlier in the week as the Russia-Ukraine conflict stoked global energy supply concerns. NG/EUO/R
Before the Russian invasion, the United States worked with other countries to ensure that gas supplies, mostly from LNG, would keep flowing to Europe. Russia, the world's second-biggest gas producer, usually provides around 30% to 40% of Europe's gas, which totaled about 16.3 billion cubic feet per day (bcfd) in 2021.
In the United States, meanwhile, front-month gas futures NGc1 fell 0.1 cent to settle at $4.526 per mmBtu, their lowest close since Feb. 28 for a second day in a row.
U.S. gas futures remain shielded from record European prices because the United States, the world's biggest gas producer, has all the fuel it needs for domestic use and the country's ability to export more LNG is limited by capacity constraints.
The United States is already producing LNG near full capacity, so no matter how high global gas prices rise, it would not be able to produce much more of the supercooled fuel any time soon.
Since U.S. LNG exports were already near maximum capacity, some analysts have noted that soaring global energy prices would likely cause American gas prices to decline as U.S. drillers seek more oil. That will boost the amount of associated gas that comes out of the ground with oil.
The U.S. Energy Information Administration (EIA) projected U.S. gas production will rise from a record 93.6 bcfd in 2021 to 96.7 bcfd in 2022 and 99.2 bcfd in 2023. Much of that additional output will come from oil shale fields like the Permian in Texas and New Mexico.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states was on track to rise to 93.5 bcfd in March from 92.5 bcfd in February as more oil and gas wells return to service after freezing earlier in the year. That compares with a monthly record of 96.2 bcfd in December.
With cooler weather coming next week, Refinitiv projected average U.S. gas demand, including exports, would rise from 110.4 bcfd this week to 111.5 bcfd next week. Those forecast were higher than Refinitiv's outlook on Tuesday.
The amount of gas flowing to U.S. LNG export plants rose to 12.59 bcfd so far in March from 12.43 bcfd in February and a record 12.44 bcfd in January. The United States has the capacity to turn about 12.5 bcfd of gas into LNG. The rest of the fuel flowing to the facilities is used to operate the plants.
Traders said demand for U.S. LNG would remain at or near record levels so long as global gas prices keep trading well above U.S. futures as utilities around the world scramble for cargoes with the threat that Russia could cut gas supplies to Europe.
Week ended Mar 4 (Forecast)
Week ended Feb 25 (Actual)
Year ago Mar 4
Five-year average Mar 4
U.S. weekly natgas storage change (bcf):
-117
-139
-59
-89
U.S. total natgas in storage (bcf):
1,526
1,643
1,800
1,809
U.S. total storage versus 5-year average
-15.6%
-13.4%
Global Gas Benchmark Futures ($ per mmBtu)
Current Day
Prior Day
This Month Last Year
Prior Year Average 2021
Five Year Average (2017-2021)
Henry Hub NGc1
4.48
4.53
2.62
3.73
2.89
Title Transfer Facility (TTF) TRNLTTFMc1
55.93
67.24
6.11
16.04
7.49
Japan Korea Marker (JKM) JKMc1
42.62
51.77
6.39
18.00
8.95
Refinitiv Heating (HDD), Cooling (CDD) 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
292
298
265
292
286
U.S. GFS CDDs
11
11
12
14
12
U.S. GFS TDDs
303
309
277
306
298
Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week
Current Week
Next Week
This Week Last Year
Five-Year Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production
93.1
93.6
93.8
91.0
84.7
U.S. Imports from Canada
8.9
8.3
8.8
8.5
8.5
U.S. LNG Imports
0.1
0.0
0.0
0.1
0.1
Total U.S. Supply
102.0
101.9
102.6
99.6
93.3
U.S. Demand (bcfd)
U.S. Exports to Canada
3.3
3.4
3.4
3.3
2.8
U.S. Exports to Mexico
5.8
5.5
5.5
5.7
4.9
U.S. LNG Exports
12.4
12.8
12.4
10.6
5.4
U.S. Commercial
15.2
13.2
13.9
11.4
12.3
U.S. Residential
24.7
20.8
21.9
17.6
19.5
U.S. Power Plant
28.5
23.7
23.0
23.1
25.0
U.S. Industrial
24.7
23.9
24.2
23.3
23.2
U.S. Plant Fuel
4.6
4.6
4.6
4.6
4.6
U.S. Pipe Distribution
2.7
2.4
2.4
2.3
2.7
U.S. Vehicle Fuel
0.1
0.1
0.1
0.1
0.1
Total U.S. Consumption
100.5
88.7
90.1
82.4
87.4
Total U.S. Demand
122.1
110.4
111.5
102.0
100.5
U.S. weekly power generation percent by fuel - EIA
Week ended Mar 11
Week ended Mar 4
Week ended Feb 25
Week ended Feb 18
Week ended Feb 11
Wind
16
10
12
13
12
Solar
3
3
3
3
3
Hydro
8
7
7
7
7
Other
2
2
2
2
2
Petroleum
1
1
1
1
1
Natural Gas
30
34
33
31
33
Coal
20
22
22
23
23
Nuclear
21
21
20
20
20
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub
Current Day
Prior Day
Henry Hub NG-W-HH-SNL
4.61
4.93
Transco Z6 New York NG-CG-NY-SNL
4.34
4.65
PG&E Citygate NG-CG-PGE-SNL
5.40
5.65
Dominion South NG-PCN-APP-SNL
4.11
4.29
Chicago Citygate NG-CG-CH-SNL
4.53
4.69
Algonquin Citygate NG-CG-BS-SNL
5.23
4.89
SoCal Citygate NG-SCL-CGT-SNL
4.56
4.75
Waha Hub NG-WAH-WTX-SNL
4.39
4.68
AECO NG-ASH-ALB-SNL
4.12
4.05
SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub
Current Day
New England EL-PK-NPMS-SNL
59.75
48.50
PJM West EL-PK-PJMW-SNL
47.50
41.75
Ercot North EL-PK-ERTN-SNL
62.20
95.75
Mid C EL-PK-MIDC-SNL
40.65
35.99
Palo Verde EL-PK-PLVD-SNL
29.50
36.00
SP-15 EL-PK-SP15-SNL
29.75
38.00
(Reporting by Scott DiSavino Editing by Bernadette Baum and Jonathan Oatis)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
