U.S. natural gas futures fell about 2% to a more than two-week low on April 15, weighed down by lower demand forecasts for this week than previously expected due primarily to a drop in feedgas to the Freeport LNG export plant in Texas.
Front-month gas futures for April delivery on the New York Mercantile Exchange were 3.4 cents lower, or 1.9%, to $1.74/MMBtu by 10:16 a.m. ET.
"As long as it's (Freeport LNG) offline, the market is going to stay little sluggish,... there's not enough weather demand too, to overcompensate for the that loss of demand on the LNG export," said Thomas Saal, senior vice president for energy at StoneX Financia.
Gas flows to the seven big U.S. LNG export plants slid to an average of 12.3 Bcf/d so far in April, down from 13.1 Bcf/d in March. That compares with a monthly record of 14.7 Bcf/d in December.
The amount of gas flowing to Freeport was at 0.1 Bcf/d on April 15, down from a recent high of 1.1 Bcf/d on April 9 and an average of 0.4 Bcf/d over the prior seven days.
Financial firm LSEG said gas output in the Lower 48 U.S. states has fallen to an average of 97.6 Bcf/d so far in April, down from 100.8 Bcf/d in March. That compares with a monthly record of 105.6 Bcf/d in December 2023.
LSEG forecast gas demand in the Lower 48, including exports, would fall from 99.3 Bcf/d last week to 92.4 Bcf/d this week. Those forecasts were lower than LSEG's outlook on Friday.
"With LNG demand still constrained, reduced output hasn’t been sufficient to prop this market much, especially with last week's EIA storage injection coming in appreciably above virtually all industry forecasts," energy advisory Ritterbusch and Associates said in a note.
The U.S. Energy Information Administration on April 11 said utilities injected 24 Bcf of gas to the storage during the week ended April 5.
The European benchmark wholesale gas price were mixed as record high gas storage levels in Europe helped offset geopolitical concerns and forecasts for cooler temperatures later this week.
Recommended Reading
CERAWeek: JERA CEO Touts Importance of US LNG Supply
2024-03-22 - JERA Co. Global CEO Yukio Kani said during CERAWeek by S&P Global that it was important to have a portfolio of diversified LNG supply sources, especially from the U.S.
Excelerate Energy’s CEO Kobos Bullish on US LNG
2024-02-22 - In a world rattled by instability, his company offers a measure of energy security to natural gas users via its fleet of floating storage and regasification units.
Permian Gas Finds Another Way to Asia
2024-04-30 - A crop of Mexican LNG facilities in development will connect U.S. producers to high-demand markets while avoiding the Panama Canal.
CERAWeek: Tecpetrol CEO Touts Argentina Conventional, Unconventional Potential
2024-03-28 - Tecpetrol CEO Ricardo Markous touted Argentina’s conventional and unconventional potential saying the country’s oil production would nearly double by 2030 while LNG exports would likely evolve over three phases.
CERAWeek: Trinidad Energy Minister on LNG Restructuring, Venezuelan Gas Supply
2024-03-28 - Stuart Young, Trinidad and Tobago’s Minister of Energy, discussed with Hart Energy at CERAWeek by S&P Global, the restructuring of Atlantic LNG, the geopolitical noise around inking deals with U.S.-sanctioned Venezuela and plans to source gas from Venezuela and Suriname.