US natgas futures at fresh 8-month high on rising LNG exports, hot weather
- Front-month gas futures rose 0.9 cents, or 0.4%, to settle at $2.426 per million British thermal units.
- US LNG exports were on track to rise in August for the first time in six months.
US natural gas futures edged up to a fresh eight-month high on Wednesday as liquefied natural gas (LNG) exports continue to rise and on forecasts for more hot weather and heating demand through early September than previously expected.
Front-month gas futures rose 0.9 cents, or 0.4%, to settle at $2.426 per million British thermal units, their highest close since Dec. 5 for a second day in a row.
Although US, European and Asian gas contracts mostly trade on their own fundamentals, a 59% jump in prices at the Title Transfer Facility (TTF) benchmark in the Netherlands and a 65% increase at the Japan-Korea Marker (JKM) so far in August helped pull US gas futures up about 33% this month, making US LNG more attractive to global markets.
US LNG exports were on track to rise in August for the first time in six months. Pipeline gas flowing to the plants climbed to a three-month high of 4.4 billion cubic feet per day (bcfd) so far this month from a 21-month low of 3.3 bcfd in July.
With temperatures expected to remain hot through early September, Refinitiv projected US demand, including exports, will hold around 90.2 bcfd this week and next. That is higher than Refinitiv's forecast on Tuesday.
US production has averaged 88.5 bcfd so far in August, up from a two-month high of 88.0 bcfd in July. That, however, is still well below November's all-time monthly high of 95.4 bcfd.
In California, meanwhile, power companies continued to urge customers to conserve energy through Thursday to avoid more rotating outages as the brutal heat wave blanketing the state over the past week pushes the demand forecast for Wednesday over the prior day's three-year high.
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