NEW YORK: US natural gas prices slipped more than 1% on Tuesday, as rising output and forecasts for milder weather offset a higher demand outlook for next week and record flows to liquefied natural gas (LNG) export facilities.
Front-month gas futures for April delivery on the New York Mercantile Exchange were down 5.7 cents, or 1.3%, at $4.433 per million British thermal units (mmBtu) as of 9:58 a.m. EDT (1358 GMT). Prices rose to their highest level since December 2022 on Monday.
“With the weather factor diminishing in importance with near-record temperatures expected across some key consuming regions this week, further downward adjustment in HDD (heating degree days) accumulation would normally be pressing values lower,” energy advisory firm Ritterbusch and Associates said in a note.
Financial firm LSEG estimated 213 heating degree days over the next two weeks in the Lower 48 US states, down from the 221 HDDs estimated on Monday. The normal level is 278 HDDs for this time of year. Meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through March 15.
LSEG said average gas output in the Lower 48 US states has risen to 105.7 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.
However, LSEG forecast average gas demand in the Lower 48 states, including exports, will rise from 110.4 bcfd this week to 113.3 bcfd next week. Forecasts for next week were higher compared to LSEG’s outlook on Monday.
Dutch and British wholesale gas prices rose on Tuesday amid lower Norwegian exports to Europe and higher demand. 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 US after US 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.
In 2024, Canada supplied about 8% of total US gas demand, including exports, and about 1% of total US power demand, again including exports. Some of those power and gas exports returned to Canada. In the import market, Canadian gas exports to the US have dropped to an average of 8.8 bcfd over the past few days since Trump’s tariffs were imposed, 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 US in 2024 and 7.6 bcfd over the prior five years (2019-2023).
The amount of gas flowing to the eight big US 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.
“We continue to expect 2026 Henry Hub prices to remain above $4/mmBtu to incentivize drilling increases in the Haynesville region, the current source of marginal US dry gas production growth, to help keep storage comfortable in the 2026/27 winter as US LNG exports continue to move higher,” Goldman Sachs said in a note.
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