NEW YORK: US natural gas futures held near a three-week low on Tuesday on record output and forecasts for milder weather and lower demand over the next two weeks than previously expected. Traders noted higher demand from the expected return of Freeport LNG’s export plant in Texas on Tuesday from an outage on Monday offset the forecast for lower demand from milder weather.
Front-month gas futures for April delivery on the New York Mercantile Exchange were up 1.6 cents, or 0.4%, to $3.93 per million British thermal units (mmBtu) at 8:51 a.m. EDT (1251 GMT). On Monday, the contract closed at its lowest price since February 28.
Lower gas demand expected in coming weeks should allow utilities to keep adding fuel to storage this month.
Some analysts say gas stockpiles were on track to increase in March for the first time since 2012 and only the second time in history.
Gas stockpiles, however, were still about 8% 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.
Financial firm LSEG said average gas output in the Lower 48 US states rose to 106.0 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.
Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through April 9.
With seasonally milder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 107.0 bcfd this week to 102.7 bcfd next week. Those forecasts were lower than LSEG’s outlook on Monday.
The amount of gas flowing to the eight big operating US LNG export plants has risen to an average of 15.7 bcfd so far in March, up from a record 15.6 bcfd in February as new units at Venture Global’s 3.2-bcfd Plaquemines LNG plant under construction in Louisiana enter service. In Texas, gas flows to Freeport LNG’s 2.1-bcfd export plant in Texas were set to rise on Tuesday after a lightning strike on a pipeline caused the plant to shut on Monday, according to LSEG data. The US 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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