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
ONEOK CEO: ‘Huge Competitive Advantage’ to Upping Permian NGL Capacity
2024-03-27 - ONEOK is getting deeper into refined products and adding new crude pipelines through an $18.8 billion acquisition of Magellan Midstream. But the Tulsa company aims to capitalize on NGL output growth with expansion projects in the Permian and Rockies.
As ONEOK Digests Magellan, Sets Stage for More NGL Growth in 2024
2024-02-28 - ONEOK is continuing the integration of its newly acquired Magellan assets in 2024 as the company keeps an eye out for M&A opportunities and awaits regulatory approvals for certain projects.
Making Bank: Top 10 Oil and Gas Dealmakers in North America
2024-02-29 - MergerLinks ranks the key dealmakers behind the U.S. biggest M&A transactions of 2023.
Dallas Fed Energy Survey: Permian Basin Breakeven Costs Moving Up
2024-03-28 - Breakeven costs in America’s hottest oil play continue to rise, but crude producers are still making money, according to the first-quarter Dallas Fed Energy Survey. The situation is more dire for natural gas producers.
Marketed: Team Operating Gulf Coast Opportunity
2024-03-19 - Team Operating LLC has retained PetroDivest Advisors for the sale of certain oil and gas leasehold and related assets spanning multiple counties in Texas, Louisiana and Mississippi.