NEW YORK: US natural gas futures jumped about 6% to a one-week high on Tuesday on a big drop in daily output and forecasts for warmer weather and higher demand over the next two weeks than previously expected.
Traders noted prices jumped despite ongoing feedgas reductions to Freeport LNG’s liquefied natural gas (LNG) export plant in Texas over the past several days.
Front-month gas futures for October delivery on the New York Mercantile Exchange rose 15.2 cents, or 5.8%, to $2.760 per million British thermal units at 11:28 a.m. EDT (1528 GMT), putting the contract on track for its highest close since Sept. 1 for a third day in a row.
That also put the front-month on track to rise for a fourth day in a row for the first time since early August.
Financial firm LSEG said average gas output in the lower 48 US states held at 102.3 billion cubic feet per day (bcfd) so far in September, the same as the record high hit in August.
On a daily basis, however, output was on track to drop about 2.9 bcfd to a preliminary 12-week low of 99.8 bcfd on Tuesday. That would be the biggest one-day decline since December, but energy traders noted preliminary data is often revised later in the day.
Meteorologists forecast the weather would remain mostly near normal from Sept. 12-18 before turning hotter than usual from Sept. 19 through at least Sept. 27.
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