(Reuters) – U.S. natural gas futures jumped about 6% to a one-month high on Wednesday as extreme cold in some parts of the country boosted demand for the fuel for heating and cut output by freezing oil and gas wells.
Traders noted prices also gained support as gas flows to liquefied natural gas (LNG) export plants hit record highs.
Front-month gas futures for March delivery on the New York Mercantile Exchange rose 23.5 cents, or 5.9%, to $4.242 per million British thermal units (mmBtu) by 8:17 a.m. EST (1317 GMT).
That put the contract on track for its highest close since January 16 when it closed at a two-year high of $4.258 per mmBtu.
It also put the front-month contract up for a seventh day in a row for the first time since July 2021 and kept it in technically overbought territory for a second straight day for the first time since November 2024.
Recent increases in gas prices coupled with a decline in oil futures cut the oil-to-gas ratio, or the level at which oil trades compared with gas, to 17 to 1, the lowest since December 2022. On an energy equivalent basis, oil should only trade six times over gas.
So far in 2025, crude prices have averaged about 20 times over gas. That compares with 33 times over gas in 2024 and 21 times over gas during the prior five years (2019-2023).
SUPPLY AND DEMAND
Financial company LSEG said average gas output in the Lower 48 U.S. states rose to 105.0 billion cubic feet per day (bcfd) so far in February, up from 102.7 bcfd in January when freezing oil and gas wells and pipes, known as freeze-offs, cut production. That compares with a monthly record of 104.6 bcfd in December 2023.
But with the return of extreme cold that is again freezing wells in some parts of the country, daily output was on track to drop by around 6.7 bcfd over the last 13 days to a preliminary four-week low of 100.1 bcfd on Wednesday.
That compares with a daily record of 106.7 bcfd on February 6. Analysts noted preliminary data is often revised later in the day.
Meteorologists projected weather in the Lower 48 states would remain colder than normal through February 22 before switching to mostly near normal levels from February 23 to March 6.
With milder weather coming, LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 146.8 bcfd this week to 129.2 bcfd next week. The forecasts for this week were higher than LSEG’s outlook on Tuesday, while the forecasts for next week were lower.
The amount of gas flowing to the eight big U.S. LNG export plants rose to an average of 15.4 bcfd so far in February, up from 14.6 bcfd in January. That compares with a monthly record high of 14.7 bcfd in December 2023.
On a daily basis, LNG feedgas hit a record 16.2 bcfd on Tuesday, topping the prior all-time daily high of 16.0 bcfd on Monday.
That LNG daily feedgas record came as flows to Venture Global’s 2.6-bcfd Plaquemines LNG export plant under construction in Louisiana were on track to hit a fresh high of 1.6 bcfd on Wednesday.
In other LNG news, LSEG noted flows to Cameron LNG’s 2.0-bcfd export plant in Louisiana were on track to drop to a preliminary two-month low of 1.6 bcfd on Wednesday, down from 2.4 bcfd on Tuesday and an average of 2.3 bcfd over the prior seven days.
Traders noted there were storms in Louisiana overnight but did not know of any possible impact from the storms on the plant. Officials at Cameron LNG were not immediately available for comment.
Week ended Week ended Year ago Five-year
Feb 14 Feb 7 Feb 14 average
Forecast Actual Feb 14 U.S. weekly natgas storage change (bcf): -168 -100 -58 -145 U.S. total natgas in storage (bcf): 2,129 2,297 2,487 2,219 U.S. total storage versus 5-year average -4.1% -2.8%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2024 (2019-2023) Henry Hub 4.08 4.01 1.80 2.41 3.52 Title Transfer Facility (TTF) 15.15 15.19 8.12 10.95 15.47 Japan Korea Marker (JKM) 14.55 14.95 8.93 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 30-Year
Norm Norm U.S. GFS HDDs 411 419 301 358 362 U.S. GFS CDDs 6 6 8 8 7 U.S. GFS TDDs 417 425 309 366 369
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2020-2024)
Average For
Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 105.3 103.3 103.7 104.8 95.8 U.S. Imports from Canada 10.2 10.8 8.7 N/A 8.0 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.2 Total U.S. Supply 115.6 114.2 112.4 N/A 104.0
U.S. Demand (bcfd) U.S. Exports to Canada 3.4 2.8 2.8 N/A 2.9 U.S. Exports to Mexico 5.8 5.4 5.9 N/A 5.0 U.S. LNG Exports 14.2 14.4 14.7 13.6 11.3 U.S. Commercial 17.7 20.7 16.0 14.2 15.9 U.S. Residential 29.8 35.3 26.0 22.9 26.4 U.S. Power Plant 33.6 32.8 30.3 33.2 30.0 U.S. Industrial 25.9 26.9 25.4 24.7 25.1 U.S. Plant Fuel 5.2 5.1 5.1 5.2 5.1 U.S. Pipe Distribution 3.1 3.3 2.8 3.1 4.0 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.2 Total U.S. Consumption 115.4 124.2 105.8 103.4 106.7 Total U.S. Demand 138.8 146.8 129.2 N/A 125.9
N/A is Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam 2025 2025 2024 2023 2022 (Fiscal year ending Sep 30) Current Day Prior Day % of Normal % of Normal % of Normal
% of Normal % of Normal Actual Actual Actual
Forecast Forecast Apr-Sep 86 86 74 83 107 Jan-Jul 84 84 76 77 102 Oct-Sep 86 86 77 76 103
U.S. weekly power generation percent by fuel – EIA
Week ended Week ended 2024 2023 2022
Feb 21 Feb 14 Wind 13 11 11 10 11 Solar 5 3 5 4 3 Hydro 6 6 6 6 6 Other 1 1 1 2 2 Petroleum 0 0 0 0 0 Natural Gas 35 40 42 41 38 Coal 21 20 16 17 21 Nuclear 19 19 19 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 6.40 4.60 Transco Z6 New York 12.84 6.99 PG&E Citygate 3.85 4.06 Eastern Gas (old Dominion South) 6.19 4.70 Chicago Citygate 7.10 5.73 Algonquin Citygate 17.50 20.21 SoCal Citygate 4.38 4.49 Waha Hub 5.32 2.90 AECO 1.44 1.88
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 169.47 179.42 PJM West 97.44 72.71 Mid C 57.41 46.97 Palo Verde 39.00 33.39 SP-15 27.94 22.58
Reporting by Scott DiSavino; Editing by Emelia Sithole-Matarise
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