Front-month gas futures for April delivery on the New York Mercantile Exchange were down 22.7 cents, or 5%, at $4.23 per million British thermal units (mmBtu) as of 9:17 a.m. EDT. Prices rose to their highest level since December 2022 on Monday but fell 0.9% in the previous session.
“I think the run-up this week was largely inspired by technical factors and bigger macro funds, but the weather this week has been rather bearish, so I think today’s action is just really a reflection,” said Kyle Cooper, energy market analyst at IAF Advisors.
Financial firm LSEG forecast average gas demand in the Lower 48 states, including exports, will fall from 111.6 bcfd this week to 104.3 bcfd next week. This was a decrease from Tuesday’s forecast of 113.3 bcfd for next week.
Meanwhile, LSEG said average gas output in the Lower 48 U.S. states has risen to 105.8 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.
LSEG estimated there would be 198 heating degree days over the next two weeks in the Lower 48 U.S. states, down from the 213 HDDs estimated on Tuesday. The normal level is 243 HDDs for this time of year. Gas prices rose more than 14% last week on record flows to LNG plants and worries Canada would reduce power and gas exports to the U.S. after President Donald Trump imposed tariffs on Canada and Mexico on March 4. Trump later said the two trading partners would not have to pay tariffs until early April on any goods that fell under the United States-Mexico-Canada Agreement. The premier of the Canadian province of Ontario said on Tuesday he was suspending plans to impose a 25% surcharge on electricity exports to the U.S. and would fly to Washington this week for talks with the Trump administration.
Canada in 2024 supplied about 8% of total U.S. gas demand, including exports, and about 1% of total U.S. power demand, again including exports. Some of those power and gas exports returned to Canada. Canadian gas exports to the U.S. have dropped to an average of 8.7 bcfd since Trump’s tariffs were announced, down from an average of 9.8 bcfd during the prior 11-day period from February 21 to March 3, according to LSEG data.
That compares with an average of 8.6 bcfd of Canadian gas exports to the U.S. in 2024 and 7.6 bcfd over the prior five years (2019-2023).
The amount of gas flowing to the eight big U.S. 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 export plant under construction in Louisiana enter service.
Meanwhile, Dutch and British wholesale gas prices were mixed, with colder weather spurring demand, and as the market awaits further clarity over a potential ceasefire in the Ukraine war after a recent step-up of attacks.
(Reporting by Anmol Choubey in Bengaluru; Editing by Paul Simao)
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