US natural gas prices jump 9% as winter storms boost heating demand, freeze wells and pipes

ReutersJan 6, 2025 2:37 PM

Winter storms knock out power to 366,000 US homes and businesses

Freezing wells and pipes reduce gas output

US LNG feedgas on track for monthly record high

By Scott DiSavino

Jan 6 (Reuters) - U.S. natural gas futures soared 9% in volatile trade on Monday as winter storms battered the eastern half of the country, causing output to decline as some oil and gas wells and pipes start to freeze.

So far, those storms have knocked out power to more than 366,000 homes and businesses from Missouri to Virginia.

Energy traders also noted that gas prices were gaining support from near-record gas flows to U.S. liquefied natural gas (LNG) export plants and forecasts for colder weather and higher heating demand over the next two weeks than previously expected.

Front-month gas futures NGc1 for February delivery on the New York Mercantile Exchange were up 31.4 cents, or 9.4%, to $3.668 per million British thermal units (mmBtu) at 9:20 a.m. EST (1420 GMT). On Friday, the contract dropped by about 8% to close at its lowest price since Dec. 17.

With big price swings in recent weeks, Monday's gain was only the biggest daily percentage increase since prices jumped by 12.0% on Dec. 30.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states has risen to 105.0 billion cubic feet per day (bcfd) so far in January, up from 103.8 bcfd in December. That compares with a record 105.3 bcfd in December 2023.

But since output hit a 10-month high of 106.0 bcfd on Dec. 30, supplies were on track to drop by around 3.4 bcfd to a preliminary six-week low of 102.6 bcfd on Monday due mostly to freezing wells and pipes, known in the energy industry as freeze-offs.

Those output declines from freeze-offs so far this winter were much smaller than in recent years. But with the coldest weather still to come, analysts have said that output declines from freeze-offs should grow in the coming days.

In past winters, freeze-offs slashed gas output by around 16.5 bcfd from Jan. 8-16 in 2024, 19.4 bcfd from Dec. 21-24 in 2022 and 20.4 bcfd from Feb. 8-17 in 2021, according to LSEG data.

Meteorologists projected weather in the Lower 48 states would remain mostly colder than normal through Jan. 21 with the coldest days expected later this week.

LSEG forecast average gas demand in the Lower 48, including exports, would ease from 147.0 bcfd this week to 146.7 bcfd next week. Those forecasts were higher than LSEG's outlook on Friday.

On a daily basis, LSEG projected total gas use could reach 155.5 bcfd on Jan. 7, falling well short of the daily record of 168.4 bcfd on Jan. 16, 2024 during another brutal winter freeze.

The amount of gas flowing to the eight big U.S. LNG export plants has risen to an average of 15.1 bcfd so far in January, up from 14.4 bcfd in December. That compares with a monthly record high of 14.7 bcfd in December 2023.

The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices feed demand for more exports due in part to supply disruptions and sanctions linked to Russia's invasion of Ukraine in February 2022.

Gas was trading around $15 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and $14 at the Japan Korea Marker (JKM) benchmark in Asia JKMc1. NG/EU

	Week ended Jan 3 Forecast	Week ended Dec 27 Actual	Year ago Jan 3	Five-year average Jan 3
U.S. weekly natgas storage change (bcf):	-77	-116	-140	-67
U.S. total natgas in storage (bcf):	3,336	3,413	3,340	3,192
U.S. total storage versus 5-year average	4.5%	4.7%


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	3.65	3.35	2.72	2.41	3.52
Title Transfer Facility (TTF) TRNLTTFMc1	14.66	14.98	9.55	10.95	15.47
Japan Korea Marker (JKM) JKMc1	14.36	14.38	10.32	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 Norm	30-Year Norm
U.S. GFS HDDs	510	495	512	442	445
U.S. GFS CDDs	1	0	1	3	3
U.S. GFS TDDs	511	495	513	445	448

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	105.6	103.6	103.4	105.5	96.7
U.S. Imports from Canada	9.4	10.1	9.3	N/A	9.1
U.S. LNG Imports	0.1	0.0	0.0	0.0	0.2
Total U.S. Supply	114.9	113.7	112.7	N/A	106.0

U.S. Demand (bcfd)
U.S. Exports to Canada	3.8	2.7	2.8	N/A	3.0
U.S. Exports to Mexico	5.0	5.3	5.5	N/A	5.6
U.S. LNG Exports	14.3	14.5	14.7	14.7	11.6
U.S. Commercial	13.5	20.2	19.8	16.5	16.4
U.S. Residential	21.6	34.6	34.2	27.6	28.4
U.S. Power Plant	28.2	34.0	34.4	38.1	31.4
U.S. Industrial	24.5	26.9	26.8	25.9	25.7
U.S. Plant Fuel	5.2	5.1	5.1	5.2	5.2
U.S. Pipe Distribution	2.5	3.3	3.3	2.6	4.1
U.S. Vehicle Fuel	0.1	0.1	0.1	0.1	0.2
Total U.S. Consumption	95.8	124.3	123.7	116.0	111.4
Total U.S. Demand	118.9	147.0	146.7	N/A	131.6

N/A is Not Available

U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30)	2025 Current Day % of Normal Forecast	2025 Prior Day % of Normal Forecast	2024 % of Normal Actual	2023 % of Normal Actual	2022 % of Normal Actual
Apr-Sep	90	92	74	83	107
Jan-Jul	89	90	76	77	102
Oct-Sep	91	92	77	76	103


U.S. weekly power generation percent by fuel - EIA
	Week ended Jan 10	Week ended Jan 3	2024	2023	2022
Wind	12	13	11	10	11
Solar	3	4	5	4	3
Hydro	5	7	6	6	6
Other	1	1	2	2	2
Petroleum	0	0	0	0	0
Natural Gas	36	36	42	41	38
Coal	22	18	16	17	21
Nuclear	21	22	19	19	19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)
Hub	Current Day	Prior Day
Henry Hub NG-W-HH-SNL	3.40	3.65
Transco Z6 New York NG-CG-NY-SNL	4.30	3.70
PG&E Citygate NG-CG-PGE-SNL	3.24	3.29
Eastern Gas (old Dominion South) NG-PCN-APP-SNL	3.00	3.25
Chicago Citygate NG-CG-CH-SNL	3.33	3.34
Algonquin Citygate NG-CG-BS-SNL	13.75	9.61
SoCal Citygate NG-SCL-CGT-SNL	3.82	3.77
Waha Hub NG-WAH-WTX-SNL	2.69	2.06
AECO NG-ASH-ALB-SNL	1.20	1.24

ICE U.S. Power Next-Day Prices ($ per megawatt-hour)
Hub	Current Day	Prior Day
New England E-NEPLMHP-IDX	128.50	83.39
PJM West E-PJWHDAP-IDX	56.92	40.58
Mid C W-MIDCP-IDX	39.08	37.86
Palo Verde W-PVP-IDX	34.88	29.05
SP-15 W-SP15-IDX	40.00	37.75

text_section_type="notes">For gas data on the LSEG terminal type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.

For Interactive Map, type 'Interactive Map' in the box at upper left of the LSEG terminal

For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html

For next-day SNL U.S. gas prices, see: 0#SNL-NG

For next-day SNL U.S. power prices, see: 0#SNL-PWR

For U.S. natgas price and storage polls, see: NGAS/POLL

For U.S. nuclear power outages, see: NUKE/

For U.S. Northwest hydro power report, see: NWRFC

For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44

For the U.S. natural gas speed guide, see: USGAS

For the U.S. power speed guide, see: USPOWER

To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)

NYMEX Henry Hub options and futures combined 0#3CFTC023651

NYMEX Henry Hub futures only 0#1CFTC023651

ICE Henry Hub options and futures combined 0#3CFTC023391

NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B

NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C