NEW YORK: US natural gas futures rose on Thursday, hovering near a one-month high hit in the last session, as forecasts for warmer-than-normal weather through early September boosted expectations for cooling demand, while the market awaited a federal weekly storage report due later in the day.
Front-month gas futures for September delivery on the New York Mercantile Exchange rose 5.1 cents, or 1.8percent, to USD2.893 per million British thermal units. In the previous session, the contract hit USD2.911 per mmBtu, its highest level since July 24.
Futures for October, which will soon be the front-month contract, were up 1.5percent at USD2.918 per mmBtu.
“We are getting a little bit of a heat rally and seeing the LNG export market pick up again, getting back to July levels after maintenance and reduced flows,” said Phil Flynn, senior market analyst for Price Futures Group.
US LNG producer Cheniere Energy’s Corpus Christi export plant in Texas appeared to be returning to full production on Wednesday after undergoing planned maintenance, as natural gas nominations to the facility rose to about 2.5 billion cubic feet per day, according to preliminary data from financial firm LSEG.
Meteorologists forecast mostly warmer-than-normal temperatures through September 11, as Cooling Degree Days rose to 210 on Thursday. CCDs, which measure energy demand to cool buildings, have been above normal with only around 114 this time last year.
Investors now await the US Energy Information Administration’s weekly gas storage report, which is due at 10:30 a.m. EDT.
US energy firms likely added a below-normal 20 billion cubic feet of natural gas into storage last week, according to the average estimate in a Reuters poll.
The estimate compares with an injection of 17 bcf during the same week a year ago and an average increase for that week of 33 bcf over the past five years (2021-2025). In the prior week ended August 14, energy firms added 16 bcf of gas into storage.
The storage report could be the next major driver for prices, with a larger-than-expected inventory build potentially pulling futures back toward the mid-USD2.60 range, while a smaller-than-expected injection could extend the recent rally, added Flynn.
Financial group LSEG said average gas output in the US Lower 48 states has reached 111.4 billion cubic feet per day so far in August, up from a monthly record high of 110.7 bcfd in July.
Average gas flows to the nine big US LNG export plants stand at 17.1 bcfd so far in August, slightly down from 17.2 bcfd in July and a monthly record high of 17.4 bcfd in June.
LSEG projected average gas demand in the Lower 48 states, including exports, would remain steady at 112.2 bcfd from this week to next week.
Elsewhere, Benchmark Dutch and British wholesale gas prices declined on hopes for diplomacy efforts to be re-launched after the United States and Iran traded recriminations this week.
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