US natgas futures edge up on warmer weather forecasts, rising exports

US natural gas futures edged up on Monday on forecasts for warmer-than-normal weather and higher air conditioning demand over the next two weeks and a small increase in exports.

Front-month gas futures were up 3.2 cents, or 1.9%, to $1.701 per million British thermal units at 8:31 a.m. EDT (1231 GMT).

Refinitiv said production in the Lower 48 US states averaged just 87.7 billion cubic feet per day (bcfd) in June, down from a 16-month low of 88.2 bcfd in May and an all-time monthly high of 95.4 bcfd in November. On a daily basis, however, output hit a five-week high of 88.4 bcfd over the weekend, up from a 19-month low of 85.7 bcfd in late May.

With warmer weather coming, Refinitiv forecast US demand, including exports, would rise from 84.8 bcfd this week to 86.6 bcfd next week. That confirms Refinitiv's warmer-than-usual projection but was slightly lower than its outlook on Friday.

The amount of pipeline gas flowing to US liquefied natural gas export plants averaged just 4.0 bcfd (41% utilization) in June, down from an eight-month low of 6.4 bcfd in May and a record high of 8.7 bcfd in February. Utilization was about 90% in calendar 2019.

On a daily basis, however, LNG exports were on track to rise to 4.1 bcfd on Monday from a 14-month low of 3.6 bcfd last week.

US pipeline exports, meanwhile, are rising as North American consumers crank up their air conditioners.

Refinitiv said pipeline exports to Canada averaged 2.3 bcfd in June, up from a seven-month low of 2.2 bcfd in May but still well below the all-time monthly high of 3.5 bcfd in December. Pipeline exports to Mexico averaged 5.3 bcfd this month, up from 4.8 bcfd in May but shy of the record 5.6 bcfd in March.