NEW YORK: US natural gas futures jumped almost 5% to a nine-month high on Thursday as output fell to its lowest since May due to shutdowns of offshore wells before Hurricane Laura crashed into the Gulf Coast near the Texas-Louisiana border, and expectations for a third straight day of record pipeline exports to Mexico.
Prices jumped despite a drop in liquefied natural gas (LNG) exports to their lowest since February 2019 as Gulf Coast LNG export plants shut and vessels steered clear of the storm, and traders noted that price gains held after a report showed a storage build in line with estimates.
Hurricane Laura smashed into the Gulf Coast overnight as a major Category 4 storm with sustained winds of 150 miles per hour (241 kph), causing over 650,000 power outages in Texas and Louisiana.
The US Energy Information Administration (EIA) said US utilities injected 45 billion cubic feet (bcf) of gas into storage in the week ended Aug. 21 - close to the 47-bcf build analysts forecast in a Reuters poll and less than an increase of 60 bcf during the same week last year and a five-year (2015-19) average build of 49 bcf.
On its last day as the front-month, gas futures for September delivery rose 11.8 cents, or 4.8%, to settle at $2.579 per million British thermal units (mmBtu), their highest close since Nov. 22. The October contract, which will soon be the front-month, was up about 14 cents to $2.71 per mmBtu, which would be the front-month's highest close since November 8.
On a daily basis, US LNG exports were on track to fall to 2.1 billion cubic feet per day (bcfd), their lowest since February 2019 after Cheniere Energy Inc and Cameron LNG shut their export plants in Louisiana. US output, meanwhile, was on track to drop to a three-month low of 85.4 bcfd, according to preliminary data from Refinitiv.
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