US Natural Gas Prices Drop 3% Ahead of Cooler Weather Forecasts
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U.S. natural gas futures fell about 3% on Monday on near-record output, ample fuel in stockpiles and forecasts for less hot weather next week than previously expected.
Front-month gas futures for September delivery on the New York Mercantile Exchange fell 9.5 cents, or 3.3%, to $2.821 per million British thermal units by 5:53 a.m. EDT (0953 GMT).
The U.S. National Hurricane Center (NHC) projected Hurricane Erin, which was near the Bahamas, would move north and then east off the U.S. East Coast, for the rest of the week without hitting land.
The NHC, however, said another system in the Atlantic Ocean behind Erin had a 50% chance of strengthening into a cyclone over the next week as it moves west toward Puerto Rico.
Even though storms can boost gas prices by knocking Gulf of Mexico gas production out of service, analysts have said storms are more likely to cut demand and prices by shutting LNG export plants and knocking power out to millions of homes and businesses, reducing the amount of gas electric generators need to burn.
Only about 2% of all U.S. gas comes from the federal offshore Gulf of Mexico, while over 40% of the electricity produced in the U.S. comes from gas-fired power plants.
SUPPLY AND DEMAND
Financial group LSEG said average gas output in the Lower 48 states rose to 108.2 billion cubic feet per day so far in August, up from a record monthly high of 107.9 bcfd in July.
Meteorologists forecast the weather will remain mostly hotter than normal through at least September 2.
Despite hotter-than-usual weather so far this summer, record output has allowed energy companies to inject more gas into storage than usual in recent months.
Analysts said there was about 6% more gas in storage than normal for this time of year and predicted the amount of gas in stockpiles would keep growing in coming weeks.
LSEG projected average gas demand in the Lower 48 states, including exports, would ease from 110.7 bcfd this week to 106.8 bcfd next week. The forecast for next week was lower than LSEG's outlook on Friday.
The average amount of gas flowing to the eight big U.S. LNG export plants rose to 16.0 bcfd so far in August, up from 15.5 bcfd in July. That compares with a record monthly high of 16.0 bcfd in April.
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 near a one-year low of $11 per mmBtu at the Dutch Title Transfer Facility benchmark in Europe and at a 15-month low of $11 at the Japan Korea Marker benchmark in Asia.
Week ended Aug 15 Forecast | Week ended Aug 8 Actual | Year ago Aug 15 | Five-year average Aug 15 | ||
U.S. weekly natgas storage change (bcf): | +30 | +56 | +29 | +35 | |
U.S. total natgas in storage (bcf): | 3,216 | 3,186 | 3,294 | 3,025 | |
U.S. total storage versus 5-year average | +6.3% | +6.6% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2024 | Five-Year Average (2019-2023) |
Henry Hub <NGc1> | 2.81 | 2.92 | 2.09 | 2.41 | 3.52 |
Title Transfer Facility (TTF) <TRNLTTFMc1> | 10.70 | 10.59 | 12.40 | 10.95 | 15.47 |
Japan Korea Marker (JKM) <JKMc1> | 10.95 | 11.91 | 13.31 | 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 | 4 | 3 | 5 | 6 | 7 |
U.S. GFS CDDs | 196 | 220 | 207 | 185 | 172 |
U.S. GFS TDDs | 200 | 223 | 212 | 191 | 179 |
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 | 108.2 | 108.0 | 107.8 | 101.7 | 97.9 |
U.S. Imports from Canada | 7.7 | 7.5 | 7.6 | N/A | 7.5 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 115.9 | 115.5 | 115.4 | N/A | 105.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 2.3 | 2.4 | 2.3 | N/A | 2.3 |
U.S. Exports to Mexico | 7.5 | 7.2 | 7.2 | N/A | 6.4 |
U.S. LNG Export Feedgas | 15.8 | 14.6 | 15.0 | 13.1 | 10.2 |
U.S. Commercial | 4.4 | 4.5 | 4.5 | 4.5 | 4.6 |
U.S. Residential | 3.6 | 3.6 | 3.6 | 3.7 | 3.4 |
U.S. Power Plant | 48.1 | 48.4 | 44.3 | 43.5 | 44.4 |
U.S. Industrial | 22.2 | 22.2 | 22.2 | 21.8 | 21.9 |
U.S. Plant Fuel | 5.3 | 5.3 | 5.3 | 5.3 | 5.2 |
U.S. Pipe Distribution | 2.3 | 2.3 | 2.2 | 2.2 | 3.1 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
Total U.S. Consumption | 86.0 | 86.5 | 82.3 | 81.1 | 82.8 |
Total U.S. Demand | 111.6 | 110.7 | 106.8 | N/A | 95.3 |
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 | 77 | 77 | 74 | 83 | 107 |
Jan-Jul | 78 | 78 | 76 | 77 | 102 |
Oct-Sep | 80 | 80 | 77 | 76 | 103 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Aug 22 | Week ended Aug 15 | 2024 | 2023 | 2022 | |
Wind | 7 | 11 | 10 | 11 | |
Solar | 7 | 5 | 4 | 3 | |
Hydro | 5 | 6 | 6 | 6 | |
Other | 1 | 1 | 2 | 2 | |
Petroleum | 0 | 0 | 0 | 0 | |
Natural Gas | 45 | 42 | 41 | 38 | |
Coal | 18 | 16 | 17 | 21 | |
Nuclear | 16 | 19 | 19 | 19 | |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub <NG-W-HH-SNL> | 2.98 | 2.78 | |||
Transco Z6 New York <NG-CG-NY-SNL> | 2.60 | 2.55 | |||
PG&E Citygate <NG-CG-PGE-SNL> | 3.09 | 3.06 | |||
Eastern Gas (old Dominion South) <NG-PCN-APP-SNL> | 2.48 | 2.38 | |||
Chicago Citygate <NG-CG-CH-SNL> | 2.75 | 2.64 | |||
Algonquin Citygate <NG-CG-BS-SNL> | 2.77 | 2.77 | |||
SoCal Citygate <NG-SCL-CGT-SNL> | 3.25 | 3.21 | |||
Waha Hub <NG-WAH-WTX-SNL> | 0.94 | 1.11 | |||
AECO <NG-ASH-ALB-SNL> | 0.47 | 0.33 | |||
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England <E-NEPLMHP-IDX> | 72.25 | 72.25 | |||
PJM West <E-PJWHDAP-IDX> | 74.47 | 65.26 | |||
Mid C <W-MIDCP-IDX> | 39.01 | 35.58 | |||
Palo Verde <W-PVP-IDX> | 43.00 | 37.60 | |||
SP-15 <W-SP15-IDX> | 31.33 | 25.18 |
(Reuters)
