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U.S. natural gas futures rose on Wednesday on forecasts for cooler weather and higher

heating demand over the next two weeks than previously expected.

On its second to last day as the front-month, March gas futures gained 6.5 cents, or 1.5%, to

$4.563 per million British thermal units (mmBtu) by 9:11 a.m. EST (1411 GMT).

“Futures are slightly higher this morning as traders favor bid-side interest based on the extreme cold

impacting the middle of the country,” Robert DiDona of Energy Ventures Analysis said.

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“We are approaching March contract expiration and there has been tremendous volatility around contract

expiration over the past few months,” he added.

Data provider Refinitiv estimated 390 heating degree days (HDDs) over the next two weeks in the Lower 48

U.S. states, up from 372 HDDs estimated on Tuesday. The normal is 346 HDDs for this time of year.

HDDs, used to estimate demand to heat homes and businesses, measure the number of degrees a day’s average

temperature is below 65 Fahrenheit (18 Celsius).

With colder weather coming, Refinitiv projected average U.S. gas demand, including exports, would rise

from 120.1 billion cubic feet per day this week to 123.7 bcfd next week. Those forecasts were higher than

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Refinitiv’s outlook on Tuesday.

Refinitiv said the amount of gas flowing to U.S. LNG export plants has averaged 12.4 bcfd so far in

February, in-line with January’s monthly record of 12.4 bcfd.

Refinitiv said average gas output in the U.S. Lower 48 states fell from a record 97.3 bcfd in December to

94.0 bcfd in January and 93.2 bcfd so far in February, as cold weather froze oil and gas wells in several

producing regions earlier in the new year.

Meanwhile, European gas prices extended their rally on the escalation of the Russia-Ukraine conflict and

after Germany halted certification of the Nord Stream 2 gas pipeline project.

The United States and Europe have said they would sanction Russia if it invaded Ukraine. This could prompt

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Russia to cut exports to Europe, where Russia provides around 30%-40% of gas supplies, about 16.3 bcfd in

2021.

Week ended Week ended Year ago Five-year

Feb. Feb. 11 Feb. 18 average

18(Forecast) (Actual) Feb. 18

U.S. weekly natgas storage change (bcf): -135 -190 -324 -166

U.S. total natgas in storage (bcf): 1,776 1,911 1,991 1,996

U.S. total storage versus 5-year average -11% -11.6%

Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five Year

Last Year Average Average

2021 (2017-2021)

Henry Hub 4.53 4.49 2.92 3.73 2.89

Title Transfer Facility (TTF) 28.57 25.98 6.14 16.04 7.49

Japan Korea Marker (JKM) 25.96 23.81 7.36 18.00 8.95

Refinitiv Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days

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Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year

Norm Norm

U.S. GFS HDDs 390 372 302 344 346

U.S. GFS CDDs 100 11 9 10 8

U.S. GFS TDDs 400 383 311 354 354

Refinitiv U.S. Weekly GFS Supply and Demand Forecasts

Prior Week Current Week Next Week This Week Five-Year

Last Year Average For

Month

U.S. Supply (bcfd)

U.S. Lower 48 Dry Production 94.9 94.4 94.9 83.3

U.S. Imports from Canada 8.9 8.7 9.0 8.9

U.S. LNG Imports 0.1 0.0 0.1 0.2

Total U.S. Supply 103.9 103.2 104.0 92.4

U.S. Demand (bcfd)

U.S. Exports to Canada 2.8 2.6 2.6 2.7

U.S. Exports to Mexico 5.4 5.4 5.6 4.8

U.S. LNG Exports 13.0 11.6 11.5 4.7

U.S. Commercial 16.4 16.3 17.1 15.6

U.S. Residential 26.5 27.0 28.4 26.1

U.S. Power Plant 25.1 24.6 25.6 26.3

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U.S. Industrial 25.0 24.9 25.3 24.5

U.S. Plant Fuel 4.7 4.7 4.7 4.6

U.S. Pipe Distribution 2.7 2.7 2.8 3.1

U.S. Vehicle Fuel 0.1 0.1 0.1 0.1

Total U.S. Consumption 100.4 100.3 104.0 100.3

Total U.S. Demand 121.7 120.1 123.7 112.5

U.S. weekly power generation percent by fuel – EIA

Week ended Week ended Week ended Week ended Week ended

Feb 25 Feb 18 Feb 11 Feb 4 Jan 28

Wind 18 13 12 11 9

Solar 2 3 3 2 2

Hydro 8 7 7 6 7

Other 2 2 2 2 2

Petroleum 1 1 1 1 1

Natural Gas 28 31 33 33 35

Coal 20 23 23 25 26

Nuclear 21 20 20 19 19

SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu)

Hub Current Day Prior Day

Henry Hub 4.48 4.61

Transco Z6 New York 3.97 4.60

PG&E Citygate 5.46 4.96

Dominion South 3.85 4.00

Chicago Citygate 4.54 4.37

Algonquin Citygate 4.71 8.60

SoCal Citygate 5.08 4.67

Waha Hub 4.41 3.98

AECO 5.06 4.72

SNL U.S. Power Next-Day Prices ($ per megawatt-hour)

Hub Current Day

New England 42.25 108.2

PJM West 44.50 38.00

Ercot North 48.00 34.50

Mid C 80.00 39.92

Palo Verde 51.00 27.50

SP-15 50.50 28.00

(Reporting by Brijesh Patel in Bengaluru; Editing by Kirsten Donovan)