US natgas futures jump 6pc on small storage build, rising LNG exports

US natural gas futures jumped almost 6% on Thursday on a smaller-than-expected weekly storage build, a continued decline in output and an increase in liquefied natural gas (LNG) exports.

The US Energy Information Administration (EIA) said US utilities injected just 66 billion cubic feet (bcf) of gas into storage in the week ended Sept. 18.

That was well below the 78-bcf build analysts forecast in a Reuters poll and compares with an increase of 97 bcf during the same week last year and a five-year (2015-19) average build of 80 bcf.

Front-month gas futures rose 12.3 cents, or 5.8%, to settle at a one-week high of $2.248 per million British thermal units.

The market has already been extremely volatile this week - prices fell over 10% on Monday and jumped almost 16% on Wednesday - as traders roll out of front-month October contracts, which expire on Sept. 28, and into much higher priced November futures.

Data provider Refinitiv said output in the Lower 48 US states was on track to fall for a second month in a row to 86.9 billion cubic feet per day (bcfd) in September from 87.5 bcfd in August. That is well below the all-time monthly high of 95.4 bcfd in November.

Refinitiv projected demand, including exports, would rise from 82.6 bcfd this week to 85.3 bcfd next week as LNG exports increase.

The amount of gas flowing to LNG export plants was on track to reach 5.7 bcfd on Thursday from a two-week low of 3.9 bcfd on Tuesday as vessels returned to Gulf Coast terminals after Tropical Storm Beta dissipated.

Traders said the Cameron LNG export plant in Louisiana will likely return to service around Oct. 8 when the Army Corps of Engineers expects to finish dredging the Calcasieu Ship Channel after Hurricane Laura.