US natgas prices ease on record output, mild weather forecasts

By Scott DiSavino

April 1 (Reuters) - U.S. natural gas futures eased about 1% on Monday on record output in March and forecasts for milder weather and lower demand next week than previously expected.

The price decline came despite record gas flows to liquefied natural gas export plants in March.

Gas futures NGc1 for May delivery on the New York Mercantile Exchange were down 4.1 cents, or 1.0%, at $4.078 per million British thermal units (mmBtu) at 6:09 a.m. EDT (1009 GMT). On Monday, the contract closed at its highest level since March 19 for a second day in a row.

Energy traders said mild weather and low demand in March likely allowed utilities to add gas to storage in March for the first time since 2012 and only the second time in history.

Gas stockpiles however were still about 5% below normal levels for this time of year after extremely cold weather in January and February forced energy firms to pull large amounts of gas out of storage, including record amounts in January. EIA/GAS NGAS/POLL

In the spot market, gas prices at the Waha Hub NG-WAH-WTX-SNL in the Permian shale in West Texas turned negative for the third time this year due to pipeline maintenance that trapped gas associated with oil production in the basin.

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.

Pipeline constraints have caused next-day Waha prices to turn negative a record 49 times in 2024. Waha prices averaged below zero 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 a record 106.1 billion cubic feet per day in March, up from the prior all-time high of 105.1 bcfd in February.

Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through April 16.

LSEG forecast average gas demand in the Lower 48, including exports, will rise from 102.9 bcfd this week to 105.0 bcfd next week. The forecast for next week was lower than LSEG's outlook on Monday.

The average amount of gas flowing to the eight big operating U.S. LNG export plants rose to a record 15.8 bcfd in March from the prior all-time high of 15.6 bcfd in February, as new units at Venture Global's VG.N 3.2-bcfd Plaquemines LNG plant under construction in Louisiana entered 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 in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.

Gas traded around $13 per mmBtu at both the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and the Japan Korea Marker (JKM) JKMc1 benchmark in Asia. NG/EU

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