U.S. Natural Gas Prices Hover Near 10-Week Low as Market Awaits Storage Data
(Reuters) — U.S. natural gas futures held near a 10-week low on Thursday as the market waited for direction from a federal report expected to show that energy firms added less gas to storage than usual last week as cool weather kept heating demand for the fuel higher than normal for this time of year.
Gas futures for May delivery on the New York Mercantile Exchange rose 0.2 cents, or 0.1%, to $3.249 per million British thermal units at 9:38 a.m. EDT (1338 GMT). On Wednesday, the contract closed at its lowest since January 31.
That lack of price movement kept the contract in oversold territory for a second day in a row for the first time since January.
Analysts projected utilities added 22 billion cubic feet of gas into storage during the week ended April 11.
That compares with an increase of 46 bcf during the same week last year and a five-year average build of 50 Bcf for this time of year.
Supply and Demand
Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 106.3 billion cubic feet per day so far in April, up from a monthly record of 106.2 Bcf/d in March.
On a daily basis, however, output was on track to drop to a one-week low of 105.5 Bcf/d on Thursday as spring pipeline maintenance leaves some gas trapped in production basins, traders and analysts have said.
Looking ahead, analysts said energy firms could cut back on oil drilling in the coming weeks due to the roughly 12% drop in U.S. crude futures so far in April.
The crude price drop was related in part to uncertainty tied to U.S. President Donald Trump's on-again off-again trade tariffs, which could reduce economic growth and oil demand.
Any reduction in oil drilling in shale basins such as the Permian in Texas and New Mexico and the Bakken in North Dakota could boost gas prices by cutting gas output.
Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through May 2.
With seasonally milder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will fall from 105.2 Bcf/d this week to 98.6 Bcf/d next week. Those forecasts were higher than LSEG's outlook on Wednesday.
The average amount of gas flowing to the eight big LNG export plants operating in the U.S. climbed from a monthly record of 15.8 Bcf/d in March to 16.2 Bcf/d so far in April on rising flows to Venture Global's 3.2-Bcf/d Plaquemines export plant under construction in Louisiana.
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 was trading at a one-week high of around $12 per MMBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and a 10-month low of around $12 at the Japan Korea Marker (JKM) benchmark in Asia.
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