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Business

US natural gas futures jump to three-week high

US natural gas futures rose to a three-week high on Friday on forecasts for warmer weather and higher air conditioning demand over the next two weeks.

31 May, 2020

US natural gas futures rose to a three-week high on Friday on forecasts for warmer weather and higher air conditioning demand over the next two weeks.
Front-month gas futures for July delivery rose 2.2 cents, or 1.2%, to settle at $1.849 per million British thermal units, their highest close since May 7. For the week, the front-month was up about 6% after rising about 5% last week. But for the month, it was down about 6% after jumping by a 17-month high of 19% in April.
Looking ahead, futures for the balance of 2020 and calendar 2021 were trading about 21% and 43% over the front-month, respectively, on expectations the economy will snap back as governments lift coronavirus-linked travel restrictions.
Data provider Refinitiv said average gas output in the US Lower 48 states fell to 89.2 billion cubic feet per day (bcfd) so far in May, down from an eight-month low of 92.9 bcfd in April and an all-time monthly high of 95.4 bcfd in November.
With warmer weather coming, Refinitiv projected demand, including exports, would rise from 78.5 bcfd this week to 79.3 bcfd next week and 82.4 bcfd in two weeks.

Copyright Reuters, 2020