US natgas edges up from 9-month low on Friday, but still down 24% for week

By Scott DiSavino Feb 2 (Reuters) - U.S. natural gas futures edged up about 1% on Friday as forecasts for seasonally cold weather later this month helped prices bounce after they closed the prior session at a nine-month low. The front-month remained on track for its second weekly plunge of around 24% in three weeks. Last week, prices rose about 8%. Colder temperatures should boost heating demand in mid-February. For now, meteorologists expect the weather to remain warmer than normal. Energy analysts noted output was rising as more wells return to service after a mid-January freeze. The amount of gas flowing to the nation's liquefied natural gas export plants will remain low so long as a unit at Freeport LNG's export plant in Texas remains shut. Front-month gas futures for March delivery on the New York Mercantile Exchange (NYMEX) rose 1.9 cents, or 0.9%, to $2.069 per million British thermal units (mmBtu) at 9:40 a.m. EST (1440 GMT). On Thursday, the contract settled at its lowest since April 13, 2023. It remained in technically oversold territory for a fourth day in a row. In addition to massive declines in gas prices in recent weeks, another sign that the energy market was giving up on the winter of 2023-2024 was a drop in spot power prices at the PJM West hub , which covers an area from northwestern Pennsylvania to Washington, D.C. Next-day prices at PJM West fell to $19.25 per megawatt hour (MWh) for Friday, their lowest since December 2021. Rising price volatility has increased interest in gas trading in recent weeks, boosting open interest in NYMEX futures to 1.48 million contracts on Jan. 31, the most since February 2020 for a second day in a row. SUPPLY AND DEMAND Financial company LSEG said gas output in the U.S. Lower 48 states rose to an average of 104.7 billion cubic feet per day (bcfd) so far in February from 102.0 bcfd in January. That was still below the monthly record high of 106.3 bcfd in December. Meteorologists projected temperatures in the Lower 48 states would remain warmer than normal through at least Feb. 15 before turning near normal on Feb. 16-17. LSEG forecast U.S. gas demand in the Lower 48, including exports, would slide from 126.6 bcfd this week to 125.1 bcfd next week and 124.5 bcfd in two weeks. The forecast for next week was lower than LSEG's outlook on Thursday. Gas flows to the seven big U.S. LNG export plants rose to an average of 14.0 bcfd so far in February, up from 13.9 in January. That was still below the monthly record high of 14.7 bcfd in December. Analysts said U.S. LNG feedgas would likely not revisit record levels until Freeport LNG returns to full power, which is expected to occur in mid- to late-February. The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's war in Ukraine. Gas was trading around $9 per mmBtu at both the Dutch Title Transfer Facility (TTF) benchmark in Europe and the Japan Korea Marker (JKM) benchmark in Asia. Week ended Week ended Year ago Five-year Feb 2 Jan 26 Feb 2 average Forecast Actual Feb 2 U.S. weekly natgas storage change (bcf): -86 -197 -208 -193 U.S. total natgas in storage (bcf): 2,573 2,659 2,397 2,336 U.S. total storage versus 5-year average 10.1% 5.1% Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year Last Year Average Average 2023 (2018-2022) Henry Hub 2.07 2.05 2.44 2.66 3.60 Title Transfer Facility (TTF) 9.25 9.19 16.52 13.04 14.39 Japan Korea Marker (JKM) 9.46 9.53 16.87 14.39 14.31 LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year Norm Norm U.S. GFS HDDs 333 337 415 422 415 U.S. GFS CDDs 1 1 5 5 4 U.S. GFS TDDs 334 338 420 427 419 LSEG U.S. Weekly GFS Supply and Demand Forecasts Prior Week Current Next Week This Week Five-Year Week Last Year (2019-2023) Average For Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 103.2 104.8 104.8 97.8 92.4 U.S. Imports from Canada 10.0 9.4 9.7 9.3 9.1 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2 Total U.S. Supply 113.2 114.2 114.5 107.1 101.7 U.S. Demand (bcfd) U.S. Exports to Canada 2.5 3.4 3.6 2.1 2.7 U.S. Exports to Mexico 5.9 6.6 6.4 5.6 5.2 U.S. LNG Exports 13.7 14.1 13.8 12.7 8.4 U.S. Commercial 18.2 13.8 13.9 19.2 16.3 U.S. Residential 30.9 21.8 23.8 33.1 27.6 U.S. Power Plant 38.7 34.5 32.3 34.5 29.3 U.S. Industrial 26.2 24.5 24.4 26.3 25.4 U.S. Plant Fuel 5.1 5.2 5.2 5.1 5.3 U.S. Pipe Distribution 3.3 2.7 2.7 3.3 2.7 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.1 Total U.S. Consumption 122.5 102.6 101.3 121.6 106.7 Total U.S. Demand 144.5 126.6 125.1 142.0 123.0 U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam Current Day Prior Day 2023 2022 2021 % of Normal % of Normal % of Normal % of Normal % of Normal Forecast Forecast Actual Actual Actual Apr-Sep 79 79 83 107 81 Jan-Jul 79 79 77 102 79 Oct-Sep 80 80 76 103 81 U.S. weekly power generation percent by fuel - EIA Week ended Week ended Week ended Week ended Week ended Feb 2 Jan 26 Jan 19 Jan 12 Jan 5 Wind 8 7 10 14 8 Solar 3 2 2 2 2 Hydro 7 6 6 6 6 Other 2 2 2 2 2 Petroleum 0 0 0 0 0 Natural Gas 41 43 39 38 42 Coal 18 22 23 19 19 Nuclear 20 19 17 19 20 SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 2.15 2.19 Transco Z6 New York 1.90 1.95 PG&E Citygate 3.46 3.13 Eastern Gas (old Dominion South) 1.75 1.70 Chicago Citygate 1.89 1.90 Algonquin Citygate 4.40 2.77 SoCal Citygate 2.82 2.95 Waha Hub 1.60 1.45 AECO 1.34 1.36 SNL U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 44.50 44.75 PJM West 19.25 27.00 Ercot North 17.00 15.50 Mid C 43.75 51.00 Palo Verde 30.50 46.25 SP-15 33.75 48.50 (Reporting by Scott DiSavino; Editing by David Gregorio)