U.S. natgas futures rise to one-week high on colder forecasts

U.S. natural gas futures edged up to a one-week high on Friday on forecasts for cooler weather and more heating demand over the next two weeks than previously expected, and continued record liquefied natural gas (LNG) exports.

Front-month gas futures rose 2.1 cents, or 0.8%, to $2.574 per million British thermal units at 7:38 a.m. EST (1238 GMT), putting the contract on track for its highest close since Dec. 4.

For the week, the contract was down less than 1% after sliding more than 9% last week.

Data provider Refinitiv said output in the Lower 48 U.S. states averaged 90.8 billion cubic feet per day so far in December.

That compares with a seven-month high of 91.0 bcfd in November 2020 and an all-time monthly high of 95.4 bcfd in November 2019.

Even though the weather is expected to remain milder than normal into late December, the latest forecasts called for slightly cooler temperatures over the next two weeks.

That prompted Refinitiv to project demand, including exports, would rise from 118.5 bcfd this week to 121.5 bcfd next week and 122.0 bcfd in two weeks.

The amount of gas flowing to U.S. LNG export plants, meanwhile, rose to an average of 10.8 bcfd so far in December, which would top November's 9.8-bcfd record.

That increase comes as the third train at Cheniere Energy Inc's Corpus Christi LNG plant in Texas prepares to enter commercial service and as rising prices in Europe and Asia prompt buyers to purchase more U.S. gas.

Traders, however, noted those LNG exports cannot rise much more until new units enter service in the second half of 2022, since feedgas to the LNG plants was already over their 10.5-bcfd export capacity.

LNG plants can pull in a little more gas than they can export since they use some of the fuel to run the facility.