US natgas edges up on rising LNG exports, cold forecasts

US natural gas futures edged up on Monday as the market focused more on rising liquefied natural gas (LNG) exports and colder weather next week than an increase in output.

Front-month gas futures rose 2.2 cents, or 0.8%, to settle at $2.795 per million British thermal units.

Data provider Refinitiv said output in the Lower 48 US states jumped to 88.6 billion cubic feet per day (bcfd) on Friday from a 26-month low of 82.4 bcfd on Oct. 10 as wells return after shutting for Hurricane Delta.

As LNG exports rise and the weather turns colder, Refinitiv projected average demand would jump from 89.2 bcfd this week to 98.2 bcfd next week.

The amount of gas flowing to LNG export plants has averaged 6.9 bcfd so far in October, up from 5.7 bcfd in September. Traders, however, noted ship traffic into Sabine and Cameron in Louisiana was still limited by obstructions from Delta.

That would be the most LNG exports in a month since April and puts exports on track to rise for a third month in a row for the first time since February when feedgas hit a record 8.7 bcfd as rising global gas prices prompted buyers to reverse cargo cancellations.

US exports fell from March to July as coronavirus-related demand destruction caused prices in Europe and Asia to collapse to record lows and buyers to cancel around 175 US cargoes.

But now, front-month gas prices in Europe and Asia were trading at their highest since November 2019, putting them both more than $2 per mmBtu over the US Henry Hub benchmark.

In Texas, mild weather and low demand caused next-day gas at the Waha hub to fall into negative territory for the first time since April, while power at the Ercot North hub dropped to its lowest since May 2017.