NEW YORK: US natural gas futures slipped over 2% on Friday after rallying more than 5% on Thursday as output continues to rise and with utilities expected to keep stockpiling gas into mid-November.
That price decline came despite forecasts for cooler, near-normal weather over the next two weeks that will boost heating demand higher than previously expected through late November.
In October, global gas prices hit record highs as utilities around the world scrambled for liquefied natural gas (LNG) cargoes to replenish low stockpiles in Europe and meet insatiable demand in Asia, where energy shortfalls have caused power blackouts in China.
US futures climbed to a 12-year high in early October on expectations LNG demand would remain strong for months, but overseas prices rose by much more because the United States has plenty of gas in storage and ample production.
Analysts have said that European inventories were about 20% below normal for this time of year, compared with 3% below normal in the United States.
Despite recent declines, gas prices in Europe and Asia were still trading about five times higher than in the United States.
Front-month gas futures fell 10.7 cents, or 2.1%, to $5.042 per million British thermal units (mmBtu) at 8:14 a.m. EST (1314 GMT).
For the week, the contract was on track to fall about 9% after gaining almost 5% in the prior two weeks.
Data provider Refinitiv said output in the US Lower 48 states averaged 96.1 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October and a monthly record of 95.4 bcfd in November 2019.
Refinitiv projected average US gas demand, including exports, would jump from 97.0 bcfd this week to 104.4 bcfd next week and 109.4 bcfd in two weeks as the weather turns seasonally colder and homes and businesses crank up their heaters. The forecasts for next week were higher than Refinitiv projected on Thursday.
US exports to Canada, meanwhile, were on track to reach 3.7 bcfd on Friday, their highest in a day since December 2019, as flows from Maine to New Brunswick and Michigan to Ontario hit their highest in years, according to Refinitiv data.
Comments
Comments are closed.