By Scott DiSavino

(Reuters) -U.S. natural gas futures slid about 2% to a two-week low on Monday on record output, negative spot prices at the Waha Hub in West Texas and forecasts for mild weather through early April, which should keep the amount of gas utilities pull from storage to heat homes and businesses lower than usual for this time of year.

Gas stockpiles, however, remained about 12% below normal levels after extreme cold in January and February forced energy firms to pull massive amounts of gas out of storage, including record amounts in January. [EIA /GAS] [NGAS/POLL]

Front-month gas futures for April delivery on the New York Mercantile Exchange fell 8.6 cents, or 2.1%, to settle at $4.018 per million British thermal units (mmBtu), their lowest close since February 28.

That futures price decline occurred despite record gas flows to U.S. liquefied natural gas export (LNG) plants and forecasts for more demand this week than previously expected.

In the spot market, gas prices at the Waha Hub in the Permian shale in West Texas turned negative for the first time since November 2024 due to pipeline maintenance that trapped gas associated with oil production in the basin.

Traders talked of maintenance on U.S. energy firm Kinder Morgan’s El Paso Natural Gas pipe from Texas, New Mexico and Colorado to California and Arizona and WhiteWater, MPLX and Enbridge’s Whistler pipeline from West Texas to the Texas Gulf Coast.

With Permian oil production hitting record highs every year since at least 2016, according to data from the U.S. Energy Information Administration and the Federal Reserve Bank of Dallas, energy firms have had a hard time building gas pipes fast enough to keep up with soaring associated gas output. Permian gas production has also hit record highs every year since at least 2018.

Those pipeline constraints caused next-day gas prices to turn negative a record 49 times in 2024. Waha prices first averaged below zero in 2019. It happened 17 times in 2019, six times in 2020 and once in 2023.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.9 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.

Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through April 1.

LSEG forecast average gas demand in the Lower 48, including exports, will rise from 107.2 bcfd this week to 107.7 bcfd next week. The forecast for this week was higher than LSEG’s outlook on Friday.

The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 15.7 bcfd so far in March, up from a record 15.6 bcfd in February, as new units at Venture Global’s 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana enter service.

The U.S. became the world’s biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due partly to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.

Gas was trading at a one-week low of around $13 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and a 12-week low of $13 at the Japan Korea Marker (JKM) benchmark in Asia. [NG/EU]

  Week ended Week ended Year ago Five-year  

Mar 14 Mar 7 Mar 14 average  

Forecast Actual Mar 14

U.S. weekly natgas storage change (bcf): -19 -62 +5 -31  

U.S. total natgas in storage (bcf): 1,679 1,698 2,331 1,897  

U.S. total storage versus 5-year average -11.5 -11.9%      

           

           

Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year

Last Year Average Average

2024 (2019-2023)

Henry Hub 4.18 4.10 1.75 2.41 3.52

Title Transfer Facility (TTF) 13.23 13.44 8.54 10.95 15.47

Japan Korea Marker (JKM) 13.64 13.67 8.95 11.89 15.23

           

           

LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days          

Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year

Norm Norm

U.S. GFS HDDs 229 222 255 246 252

U.S. GFS CDDs 18 17 10 20 16

U.S. GFS TDDs 247 239 265 266 268

           

LSEG U.S. Weekly GFS Supply and Demand Forecasts          

  Prior Week Current Next Week This Week Five-Year

Week Last Year (2020-2024)

Average For

Month

U.S. Supply (bcfd)          

U.S. Lower 48 Dry Production 105.7 106.2 105.6 101.6 97.5

U.S. Imports from Canada 9.1 8.9 9.4 N/A 7.8

U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1

Total U.S. Supply 114.7 115.0 115.0 N/A 105.4

           

U.S. Demand (bcfd)          

U.S. Exports to Canada 3.8 4.1 4.1 N/A 3.3

U.S. Exports to Mexico 6.2 5.9 6.2 N/A 5.4

U.S. LNG Exports 15.5 16.1 15.8 13.1 11.8

U.S. Commercial 11.2 10.4 10.6 11.9 11.8

U.S. Residential 17.2 15.8 15.5 17.7 18.3

U.S. Power Plant 25.9 23.9 24.1 30.8 27.5

U.S. Industrial 23.7 23.5 23.8 24.5 23.8

U.S. Plant Fuel 5.2 5.2 5.2 5.2 5.2

U.S. Pipe Distribution 2.3 2.2 2.2 2.5 3.3

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.2

Total U.S. Consumption 85.6 81.1 81.6 92.7 90.1

Total U.S. Demand 111.1 107.2 107.7 N/A 110.6

           

N/A is Not Available          

           

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam 2025 2025 2024 2023 2022

(Fiscal year ending Sep 30) Current Day  Prior Day % of Normal % of Normal % of Normal

% of Normal % of Normal Actual Actual Actual

Forecast Forecast

Apr-Sep  93 93 74 83 107

Jan-Jul 90 90 76 77 102

Oct-Sep 91 91 77 76 103

           

           

U.S. weekly power generation percent by fuel – EIA          

  Week ended Week ended 2024 2023 2022

Mar 21 Mar 14

Wind 20 15 11 10 11

Solar 5 7 5 4 3

Hydro 7 7 6 6 6

Other 1 1 1 2 2

Petroleum 0 0 0 0 0

Natural Gas 32 34 42 41 38

Coal 13 16 16 17 21

Nuclear 21 20 19 19 19

           

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)          

Hub Current Day Prior Day      

Henry Hub 3.89 3.89      

Transco Z6 New York  2.79 3.33      

PG&E Citygate  3.70 3.71      

Eastern Gas (old Dominion South)  2.72 3.17      

Chicago Citygate  3.20 3.26      

Algonquin Citygate  3.00 3.42      

SoCal Citygate  3.82 3.94      

Waha Hub  -0.79 0.33      

AECO 1.62 1.55      

           

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)          

Hub Current Day Prior Day      

New England 41.07 51.39      

PJM West 45.70 46.84      

Mid C 38.10 39.57      

Palo Verde 23.88 18.71      

SP-15 24.53 25.00      

(Reporting by Scott DiSavino in New York; Editing by Paul Simao and Matthew Lewis)

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