Natural gas futures dip on record output, ample storage
Prices gained 17.6% in November due to strong demand
Cold weather still key driver of prices despite supply glut
Adds latest prices
By Noel John
Dec 2 (Reuters) - U.S. natural gas futures fell on Tuesday, retreating from early gains as worries about abundant supplies outweighed forecasts for colder weather and stronger demand.
Front-month gas futures for January delivery NGc1 on the New York Mercantile Exchange fell 8.1 cents, or 1.6%, to settle at $4.84 per million British thermal units (mmBtu). During the session, they hit their highest level since December 2022.
"The market may be at least supply-wise saturated, so you got a little bit of a pullback here. But we'll see if this cold weather continues," said Thomas Saal, senior vice president for energy trading at StoneX Financial.
Prices were pressured due to record output, ample amounts of gas in storage and lower gas prices around the world due mostly to the Ukraine peace talks.
Despite ample supply, strong demand helped U.S. natural gas prices to gain 17.6% in November.
"Weather remains as the primary price driver and while current cold temperatures are expected to begin moderating next week, trends across the northeast quadrant are expected to remain below normal when looking out beyond the middle of this month," consultancy Ritterbusch & Associates said in a note.
SUPPLY AND DEMAND
LSEG said average gas output in the Lower 48 states rose to a record 109.6 billion cubic feet per day (bcfd) in November from 107.0 bcfd in October and the prior all-time monthly high of 108.0 bcfd in August.
Record output this year 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 slightly from 142.0 bcfd this week to 140.5 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.
Average gas flows to the eight big LNG export plants operating in the U.S. rose to a record 18.3 bcfd in November, topping the prior all-time monthly high of 16.6 bcfd in October.
Europe's benchmark gas contract extended a nine-day losing streak on plentiful liquefied natural gas $(LNG)$ supply and muted demand from warmer-than-normal weather, curbing risks typically associated with the winter heating season. NG/EU
Elsewhere, Ukraine's state oil and gas firm Naftogaz said that Russian forces had attacked its gas production and storage facilities late on Monday and early on Tuesday.
Week ended Nov 21 Actual | Week ended Nov 14 Actual | Year ago Nov 21 | Five-year average Nov 21 | ||
U.S. weekly natgas storage change (bcf): | -11 | -14 | -2 | -25 | |
U.S. total natgas in storage (bcf): | 3,935 | 3,946 | 3,967 | 3,775 | |
U.S. total storage versus 5-year average | +4.2% | +3.8% | |||
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 | 4.94 | 4.78 | 2.98 | 2.41 | 3.52 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 9.54 | 9.54 | 13.89 | 10.95 | 15.47 |
Japan-Korea Marker (JKM) JKMc1 | 11.07 | 11.09 | 14.12 | 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) | 405 | 436 | 356 | 342 | 372 |
U.S. GFS Cooling Degree Days (CDD) | 4 | 5 | 4 | 5 | 4 |
U.S. GFS Total Degree Days (TDD) | 409 | 441 | 360 | 347 | 376 |
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 | 110.7 | 110.5 | 103.6 | 99.2 |
U.S. Imports from Canada | 8.8 | 9.6 | 9.2 | N/A | 8.1 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total U.S. Supply | 119.2 | 120.4 | 119.7 | N/A | 107.3 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 3.2 | 3.0 | 3.0 | N/A | 2.9 |
U.S. Exports to Mexico | 6.1 | 6.2 | 6.1 | N/A | 5.7 |
U.S. LNG Export Feedgas | 18.6 | 18.8 | 18.4 | 13.9 | 12.2 |
U.S. Commercial | 12.1 | 17.4 | 17.3 | 13.1 | 11.0 |
U.S. Residential | 18.9 | 29.3 | 28.9 | 20.7 | 15.7 |
U.S. Power Plant | 31.4 | 32.9 | 32.4 | 30.9 | 30.0 |
U.S. Industrial | 24.3 | 26.1 | 25.9 | 24.6 | 24.2 |
U.S. Plant Fuel | 5.5 | 5.5 | 5.5 | 5.4 | 5.3 |
U.S. Pipe Distribution | 2.5 | 3.0 | 3.0 | 2.4 | 3.3 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
Total U.S. Consumption | 94.8 | 114.3 | 113.0 | 97.2 | 89.7 |
Total U.S. Demand | 122.7 | 142.2 | 140.5 | N/A | 110.5 |
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 | 91 | 88 | 76 | 74 | 83 |
Jan-Jul | 90 | 84 | 78 | 76 | 77 |
Oct-Sep | 91 | 86 | 80 | 77 | 76 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Nov 28 | Week ended Nov 21 | 2024 | 2023 | 2022 | |
Wind | 11 | 11 | 11 | 10 | 11 |
Solar | 5 | 5 | 5 | 4 | 3 |
Hydro | 5 | 5 | 6 | 6 | 6 |
Other | 1 | 1 | 1 | 2 | 2 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
39 | 40 | 42 | 41 | 38 | |
Coal | 18 | 17 | 16 | 17 | 21 |
Nuclear | 21 | 20 | 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 | 5.08 | 4.59 | 2.10 | 2.19 | 3.49 |
Transco Z6 New York NG-CG-NY-SNL | 5.23 | 4.11 | 1.99 | 1.98 | 3.29 |
PG&E Citygate NG-CG-PGE-SNL | 4.75 | 4.34 | 3.29 | 3.04 | 5.47 |
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 4.33 | 3.92 | 1.83 | 1.68 | 2.77 |
Chicago Citygate NG-CG-CH-SNL | 4.45 | 4.30 | 1.98 | 2.00 | 3.41 |
Algonquin Citygate NG-CG-BS-SNL | 13 | 7.70 | 2.70 | 2.88 | 4.27 |
SoCal Citygate NG-SCL-CGT-SNL | 4.95 | 4.63 | 2.55 | 2.47 | 5.92 |
Waha Hub NG-WAH-WTX-SNL | 1.50 | 1.28 | 0.33 | 0.77 | 2.91 |
AECO NG-ASH-ALB-SNL | 3.05 | 2.14 | 0.98 | 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 | 124.28 | 78.88 | 44.71 | 47.35 | 48.44 |
PJM West E-PJWHRTP-IX | 83 | 72.25 | 35.99 | 41.98 | 45.33 |
Mid C W-MIDCP-IDX | 46.96 | 51.75 | 37.13 | 63.89 | 61.73 |
Palo Verde W-PVP-IDX | 36 | 32.33 | 29.23 | 39.50 | 62.42 |
SP-15 W-SP15-IDX | 46.66 | 34.83 | 30.01 | 31.30 | 58.87 |
(Reporting by Noel John in Bengaluru; additional reporting by Anushree Mukherjee, Editing by Paul Simao and David Gregorio)
((Noel.John@thomsonreuters.com;))