(Reuters) – U.S. natural gas futures held steady on Monday as record flows to liquefied natural gas (LNG) export plants offset record output and forecasts for milder weather and lower demand over the next two weeks than previously expected.
Front-month gas futures for April delivery on the New York Mercantile Exchange held at $3.983 per million British thermal units (mmBtu) at 9:05 a.m. EDT (1305 GMT).
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.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. 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 8.
With seasonally milder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 107.9 bcfd this week to 104.0 bcfd next week. The forecast for next week was lower than LSEG’s outlook on Friday.
The amount of gas flowing to the eight big operating U.S. LNG export plants rose to an average of 15.8 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.
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.
In Canada, meanwhile, traders said it looked like the Maran Gas Roxana LNG vessel was heading for the 1.8-bcfd LNG Canada export plant under construction in British Columbia to deliver a cargo from Australia to cool down the plant as part of its commercialization.
Once LNG Canada enters service – likely in mid 2025 – traders have said Canadian gas exports to the U.S. will likely decline as Canadian energy firms have another outlet for their fuel and start selling more to other countries. For now, the U.S. is the only outlet for Canadian gas.
Canada exported about 8.6 bcfd of gas via pipelines to the U.S. in 2024, up from 8.0 bcfd in 2023 and an average of 7.5 bcfd over the prior five years (2018-2022), according to data from the U.S. Energy Information Administration. That compares with a record 10.4 bcfd in 2002.
Reporting by Scott DiSavino; Editing by Kirsten Donovan
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