NEW YORK: US natural gas futures held steady on Wednesday as rising production and forecasts for lower air conditioning demand in late September offset a jump in liquefied natural gas exports and record sales to Mexico.
After dropping over 7% on Tuesday, front-month gas futures rose 0.6 cents, or 0.3%, to settle at $2.406 per million British thermal units on Wednesday.
Data provider Refinitiv said output in the Lower 48 US states was on track to rise to 87.9 billion cubic feet per day (bcfd) in September, up from a three-month low of 87.6 bcfd in August. That, however, was still well below November's all-time monthly high of 95.4 bcfd.
With exports rising and expectations for warm weather through mid September, Refinitiv projected US demand would rise from an average of 84.0 bcfd this week to 85.8 bcfd next week. That is higher than Tuesday's forecast.
In late September, however, demand is expected to decline as air conditioning use drops with the weather forecast to turn seasonably cooler.
The amount of gas flowing to US LNG export terminals soared by a record 1.8 bcfd on Tuesday as Cheniere Energy Inc's Sabine Pass plant in Louisiana continues to ramp up after shutting in late August for Hurricane Laura. Average flows so far in September were 4.1 bcfd.
That puts gas piped to LNG plants on track to rise for a second month in a row in September for the first time since February when average flows hit a record 8.7 bcfd. Coronavirus demand destruction caused US LNG exports to drop every month from March to July when flows to plants fell to a 21-month low of just 3.3 bcfd as buyers canceled cargoes.
US pipeline exports to Mexico, meanwhile, were on track to rise to 6.1 bcfd in September, which would top August's 5.9-bcfd record.
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