U.S. Gas Prices Climb 5% Amid Record LNG Flows, Forecast Changes
(Reuters) — U.S. natural gas futures climbed about 5% to a two-week high on Monday on record flows to liquefied natural gas export plants and forecasts for cooler weather and more demand next week than previously expected.
Gas futures for May delivery on the New York Mercantile Exchange were up 18.3 cents, or 4.5%, at $4.248 per million British thermal units (MMBtu) at 8:41 a.m. EDT (1241 GMT), putting the contract on track for its highest close since March 11.
That also put the contract up about 11% for the month and 17% for the quarter.
The increase in the May front-month, meanwhile, cut the premium of futures for June over May to their lowest since December 2023.
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.
In the U.S. West, mild weather and ample hydropower cut spot power prices at the Mid-Columbia Hub in Oregon to their lowest since May 2023.
Supply and Demand
Financial firm LSEG said average gas output in the Lower 48 U.S. states had risen to 105.9 billion cubic feet per day (Bcf/d) so far in March, up from a record 105.1 Bcf/d in February.
Meteorologists projected temperatures in the Lower 48 states would remain mostly near normal through April 15.
LSEG forecast average gas demand in the Lower 48, including exports, will slide from 102.6 Bcf/d this week to 106.7 Bcf/d next week. The forecasts for next week was higher than LSEG's outlook on Friday.
The amount of gas flowing to the eight big operating U.S. LNG export plants has risen to an average of 15.8 Bcf/d so far in March, up from a record 15.6 Bcf/d in February, as new units at Venture Global's 3.2-Bcf/d 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) benchmark in Europe and the Japan Korea Marker (JKM) benchmark in Asia.
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