(Adds latest prices)
March 7 (Reuters) - U.S. natural gas futures slid over 3% on Monday on forecasts for less cold weather and
lower heating demand next week than previously expected.
That price decline came even though soaring global oil and gas prices kept demand for U.S. liquefied
natural gas (LNG) exports strong as the Russia-Ukraine conflict stokes energy supply concerns, especially with
the United States and Europe considering a ban on Russian energy imports.
U.S. gas futures, however, 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 gas as liquefied natural gas (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, the U.S. can't produce much more of the supercooled fuel. European futures rose as much as
60% over Friday's record close at one point on Monday, putting European prices about 21 times over U.S.
futures.
Since the start of the year, the U.S. gas market has mostly shrugged off what was happening in Europe,
focusing more on domestic weather and supply and demand, with U.S. gas prices moving in the opposite direction
of Europe more than half the time.
But it has been hard for the U.S. market to ignore the massive gains in global energy prices in recent
weeks. Since Russia invaded Ukraine on Feb. 24, European gas futures have spiked over 280% and were at the
record high, while U.S. crude futures jumped as much as 42% to their highest since 2008.
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.
Front-month gas futures fell 18.3 cents, or 3.6%, to settle at $4.833 per million British thermal
units. On Friday, the contract closed at its highest since Feb. 2.
Data provider Refinitiv said average gas output in the U.S. Lower 48 states was on track to rise to 93.6
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 the coming of colder weather next week, Refinitiv projected average U.S. gas demand, including
exports, would rise from 109.8 bcfd this week to 115.1 bcfd next week. The forecast for next week, however,
was lower than Refinitiv's outlook on Friday.
The amount of gas flowing to U.S. LNG export plants rose to 12.60 bcfd so far in March from 12.43 bcfd in
February and a record 12.44 bcfd in January. The United States only 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.
Gas futures traded near $89 per mmBtu in Europe and $39 in Asia, compared with around
$5 in the United States.
Week ended Week ended Year ago Five-year
Mar 4 Feb 25 Mar 4 average
(Forecast) (Actual) Mar 4
U.S. weekly natgas storage change (bcf): -121 -139 -59 -89
U.S. total natgas in storage (bcf): 1,522 1,643 1,800 1,809
U.S. total storage versus 5-year average -15.9% -13.4% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year
Last Year Average Average
2021 (2017-2021)
Henry Hub 5.14 5.02 2.62 3.73 2.89
Title Transfer Facility (TTF) 89.46 65.64 6.11 16.04 7.49
Japan Korea Marker (JKM) 38.65 43.60 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 30-Year
Norm Norm
U.S. GFS HDDs 324 332 265 292 295
U.S. GFS CDDs 9 12 12 14 12
U.S. GFS TDDs 333 344 277 306 307 Refinitiv U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Week Next Week This Week Five-Year
Last Year Average For Month
U.S. Supply (bcfd)
U.S. Lower 48 Dry Production 93.1 93.8 93.8 91.0 84.7
U.S. Imports from Canada 8.9 8.5 9.0 8.5 8.5
U.S. LNG Imports 0.1 0.0 0.0 0.1 0.1
Total U.S. Supply 102.0 102.3 102.9 99.6 93.3 U.S. Demand (bcfd)
U.S. Exports to Canada 3.3 3.6 3.6 3.3 2.8
U.S. Exports to Mexico 5.8 5.4 5.5 5.7 4.9
U.S. LNG Exports 12.4 12.9 12.5 10.6 5.4
U.S. Commercial 15.2 13.1 14.8 11.4 12.3
U.S. Residential 24.7 20.6 23.6 17.6 19.5
U.S. Power Plant 28.5 23.2 23.4 23.1 25.0
U.S. Industrial 24.7 23.9 24.5 23.3 23.2
U.S. Plant Fuel 4.6 4.6 4.6 4.6 4.6
U.S. Pipe Distribution 2.7 2.3 2.5 2.3 2.7
U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1
Total U.S. Consumption 100.5 87.9 93.5 82.4 87.4
Total U.S. Demand 122.1 109.8 115.1 102.0 100.5 U.S. weekly power generation percent by fuel - EIA
Week ended Week ended Week ended Week ended Week ended
Mar 11 Mar 4 Feb 25 Feb 18 Feb 11
Wind 18 10 12 13 12
Solar 3 3 3 3 3
Hydro 8 7 7 7 7
Other 2 2 2 2 2
Petroleum 0 1 1 1 1
Natural Gas 28 34 33 31 33
Coal 19 22 22 23 23
Nuclear 22 21 20 20 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub Current Day Prior Day
Henry Hub 4.74 4.63
Transco Z6 New York 3.95 4.71
PG&E Citygate 5.65 5.41
Dominion South 3.83 4.14
Chicago Citygate 4.58 4.38
Algonquin Citygate 4.71 15.19
SoCal Citygate 4.64 4.45
Waha Hub 4.22 4.08
AECO 4.07 4.01 SNL U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub Current Day
New England 80.50 155.00
PJM West 26.25 33.50
Ercot North 37.86 29.75
Mid C 35.89 33.25
Palo Verde 26.75 42.25
SP-15 32.50 43.50
(Reporting by Scott DiSavino; editing by Jonathan Oatis)
Our Standards: The Thomson Reuters Trust Principles.