NEW YORK: US natural gas futures climbed to their highest in nine months on Monday as tropical storms in the Gulf of Mexico curbed output, even as liquefied natural gas (LNG) exports continued to rise.
Front-month gas futures rose 2.7% to settle at $2.513 per million British thermal units, having earlier touched their highest since Nov. 27 at $2.554.
Energy companies shut 44.6%, or 1,205 million cubic feet per day (mmcfd), of natural gas output due to twin storm threat in the Gulf of Mexico, the federal Bureau of Safety and Environmental Enforcement (BSEE) said on Sunday.
Marco, previously a hurricane, weakened to a tropical storm on Sunday, while Tropical Storm Laura was forecast to strengthen into a hurricane by early Tuesday, the US National Hurricane Centre (NHC).
"There is still a possibility that Laura could become a Category 2 or a Category 3 hurricane next week. So, we are going to see some production losses because of the shutdown," said Phil Flynn, a senior analyst at Price Futures Group in Chicago.
"(However,) the question is if the production loss is going to be bigger than demand," he said, adding that expectations of improvement in the global LNG exports market are offering some additional support to prices.
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