NEW YORK: US natural gas futures held near a three-week high on Tuesday on forecasts for cooler weather and more demand in late November, record gas flows to liquefied natural gas export plants and a drop in output in recent weeks.
Front-month gas futures for December delivery on the New York Mercantile Exchange rose 0.6 cents to USD3.224 per million British thermal units, putting the contract on track for its highest close since October 15 for a second day in a row.
That also kept the front-month in technically overbought territory for a second day in a row for the first time since June.
Financial firm LSEG said average gas output in the US Lower 48 states fell to 112.2 billion cubic feet per day (bcfd) so far in November, down from 113.4 bcfd in October and a monthly record high of 115 bcfd in August.
On a daily basis, however, output was on track to drop to a five-month low of 109.7 bcfd on Tuesday.
Record output and mostly mild weather in the spring and autumn have allowed energy firms to keep the amount of gas in inventory above the five-year (2021-2025) average since March, with the level reaching a high of 7.7 percent above normal in April.
A hotter-than-normal summer, however, forced energy firms to pull more gas from storage than usual to fuel power plants needed to keep air conditioners humming, cutting the inventory surplus to just 1 percent above normal in mid-October. About 40 percent of US power generation comes from gas-fired plants.
But the return of mild weather and lower-than-usual demand in recent weeks has allowed energy firms to add more gas to storage.
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