Volatility reaches record high, boosting trading volume
LSEG projects lower gas demand next week as weather warms
Adds closing prices
By Scott DiSavino
NEW YORK, Feb 3 (Reuters) - U.S. natural gas futures climbed about 2% on Tuesday on a small decline in output, along with increases in gas flows to liquefied natural gas $(LNG)$ export plants and forecasts for more demand this week than previously expected.
That price increase came despite forecasts for the weather to turn warmer than normal through mid-February, and for lower demand next week than previously expected.
Gas futures for March delivery NGc1 on the New York Mercantile Exchange rose 7.4 cents, or 2.3%, to settle at $3.311 per million British thermal units (mmBtu). On Monday, the contract closed at its lowest since January 16.
Gas futures soared 140% between January 20 and 28 as extreme cold boosted heating demand to near-record highs and cut output to a two-year low by freezing oil and gas wells, before dropping 57% from January 29-February 2 as warmer weather thawed wells and boosted output.
Those massive price changes boosted historic or actual 30-day close-to-close futures volatility to a record high for a fourth day in a row, reaching 258.1% on Tuesday.
That volatility boosted trading volume in the front-month to a record 554,860 contracts on Monday, topping the prior all-time high of 459,200 contracts set in November 2018.
Higher market volatility increases traders' opportunities to profit in a shorter amount of time, but also carries greater risks.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 states eased to 106.2 billion cubic feet per day (bcfd) so far in February due mostly to reductions in North Dakota and Wyoming, down from 106.3 bcfd in January. That compares with a monthly record high of 109.7 bcfd in December.
After extreme cold last week, meteorologists projected weather across the country would turn mostly warmer than normal through February 18. Temperatures in the U.S. Northeast, however, were still expected to remain below normal for another week.
LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 159.7 bcfd this week to 143.4 bcfd next week. The forecast for this week was higher than LSEG's outlook on Monday, while its forecast for next week was lower.
Analysts projected energy firms likely pulled so much gas out of storage to meet near-record demand during the Arctic blast last week that stockpiles would go from around 5% above normal for this time of year during the week ended January 23 to about 1% below normal during the week ended January 30. EIA/GAS NGAS/POLL
Average gas flows to the eight large U.S. LNG export plants rose to 18.2 bcfd so far in February, up from 17.8 bcfd in January. That compares with a monthly record high of 18.5 bcfd in December.
Week ended Jan 30 Forecast | Week ended Jan 23 Actual | Year ago Jan 30 | Five-year average (2021-2025) Jan 30 | ||
U.S. weekly natgas storage change (bcf): | -352 | -242 | -155 | -190 | |
U.S. total natgas in storage (bcf): | 2,471 | 2,823 | 2,422 | 2,490 | |
U.S. total storage versus 5-year average | -0.8% | +5.3% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2025 | Five-Year Average (2021-2025) |
Henry Hub NGc1 | 3.23 | 3.24 | 3.74 | 3.62 | 3.79 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 11.09 | 11.91 | 15.28 | 11.94 | 18.51 |
Japan-Korea Marker (JKM) JKMc1 | 11.15 | 11.53 | 14.41 | 12.24 | 18.12 |
LSEG U.S. Global Forecast System $(GFS)$ Heating, Cooling and Total Degree Days | |||||
Two-Week Total Forecast | Current Day | Prior Day | Prior Year | 10-Year Norm | 30-Year Norm |
U.S. GFS Heating Degree Days (HDD) | 400 | 430 | 407 | 415 | 420 |
U.S. GFS Cooling Degree Days (CDD) | 3 | 3 | 14 | 5 | 4 |
U.S. GFS Total Degree Days (TDD) | 433 | 433 | 421 | 420 | 427 |
LSEG U.S. Weekly GFS Supply and Demand Forecasts | |||||
Prior Week | Current Week | Next Week | This Week Last Year | Five-Year (2021-2025) Average for Month | |
U.S. Supply (bcfd) | |||||
U.S. Lower 48 Dry Production | 98.9 | 106.7 | 107.5 | 105.6 | 97.8 |
U.S. Imports from Canada | 11.9 | 10.2 | 8.7 | N/A | 9.0 |
U.S. LNG Imports | 0.2 | 0.1 | 0.0 | 0.1 | 0.1 |
Total U.S. Supply | 110.9 | 117.0 | 116.2 | N/A | 106.9 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 2.5 | 3.0 | 2.9 | N/A | 3.5 |
U.S. Exports to Mexico | 5.7 | 5.6 | 5.9 | N/A | 5.4 |
U.S. LNG Export Feedgas | 15.3 | 18.4 | 17.9 | 15.0 | 12.6 |
U.S. Commercial | 24.6 | 21.0 | 18.1 | 15.3 | 14.6 |
U.S. Residential | 43.4 | 35.9 | 30.0 | 24.7 | 24.0 |
U.S. Power Plant | 41.5 | 39.8 | 34.2 | 32.3 | 31.8 |
U.S. Industrial | 28.2 | 27.1 | 25.8 | 24.9 | 25.2 |
U.S. Plant Fuel | 4.9 | 5.3 | 5.3 | 4.9 | 5.4 |
U.S. Pipe Distribution | 3.9 | 3.5 | 3.1 | 3.9 | 4.0 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.2 |
Total U.S. Consumption | 146.8 | 132.7 | 116.7 | 106.1 | 105.2 |
Total U.S. Demand | 170.3 | 159.7 | 143.4 | N/A | 126.7 |
N/A = Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam (Fiscal year ending Sep 30) | 2026 Current Day % of Normal Forecast | 2026 Prior Day % of Normal Forecast | 2025 % of Normal Actual | 2024 % of Normal Actual | 2023 % of Normal Actual |
Apr-Sep | 94 | 94 | 76 | 74 | 83 |
Jan-Jul | 94 | 93 | 78 | 76 | 77 |
Oct-Sep | 98 | 98 | 80 | 77 | 76 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Feb 6 | Week ended Jan 30 | 2025 | 2024 | 2023 | |
Wind | 9 | 8 | 11 | 11 | 10 |
Solar | 4 | 4 | 6 | 5 | 4 |
Hydro | 5 | 6 | 6 | 6 | 6 |
Other | 1 | 1 | 1 | 1 | 2 |
Petroleum | 2 | 2 | 0 | 0 | 0 |
40 | 39 | 40 | 42 | 41 | |
Coal | 21 | 22 | 18 | 16 | 17 |
Nuclear | 17 | 17 | 18 | 19 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | This Month Last Year | Prior Year Average 2025 | Five-Year Average (2021-2025) |
Henry Hub NG-W-HH-SNL | 4.40 | 7.18 | 4.19 | 3.52 | 3.72 |
Transco Z6 New York NG-CG-NY-SNL | 6.25 | 18.07 | 4.90 | 3.53 | 3.56 |
PG&E Citygate NG-CG-PGE-SNL | 2.05 | 2.19 | 3.78 | 3.42 | 5.47 |
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 3.79 | 5.69 | 4.03 | 2.79 | 2.96 |
Chicago Citygate NG-CG-CH-SNL | 6.05 | 6.36 | 4.19 | 3.23 | 3.60 |
Algonquin Citygate NG-CG-BS-SNL | 22.75 | 36.00 | 13.65 | 6.08 | 5.04 |
SoCal Citygate NG-SCL-CGT-SNL | 2.66 | 2.79 | 4.19 | 3.60 | 5.71 |
Waha Hub NG-WAH-WTX-SNL | 0.24 | -0.95 | 2.76 | 1.15 | 2.88 |
AECO NG-ASH-ALB-SNL | 1.41 | 1.44 | 1.53 | 1.13 | 2.13 |
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | This Month Last Year | Prior Year Average 2025 | Five-Year Average (2021-2025) |
New England E-NEPLMHP-IDX | 218.36 | 240.00 | 134.58 | 77.61 | 61.79 |
PJM West E-PJWHRTP-IX | 113.47 | 196.23 | 53.89 | 60.23 | 54.47 |
Mid C W-MIDCP-IDX | 22.33 | 19.74 | 67.87 | 44.81 | 68.96 |
Palo Verde W-PVP-IDX | 22.70 | 20.00 | 29.05 | 34.82 | 59.94 |
SP-15 W-SP15-IDX | 20.72 | 25.30 | 25.19 | 28.44 | 53.02 |
(Reporting by Scott DiSavino; Editing by David Holmes and Nick Zieminski)
((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net/))
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