NEW YORK: US natural gas futures eased on Tuesday from a 19-month high in the prior session as output started to rise after Hurricane Delta and on forecasts for less demand over the next two weeks than previously expected.
That price drop came despite a continued increase in gas flows to liquefied natural gas (LNG) export plants now that all facilities were ramping up following hurricane and maintenance shutdowns over the past few weeks.
Front-month gas futures fell 2.6 cents, or 0.9%, to settle at $2.855 per million British thermal units. On Monday, the contract closed at its highest level since March 2019.
Data provider Refinitiv said output in the Lower 48 US states jumped to 84.1 billion cubic feet per day (bcfd) on Monday from a 26-month low of 82.4 bcfd over the weekend as wells shut for Delta returned to service.
As LNG exports rise and the weather turns colder, Refinitiv projected average demand would jump from 84.6 bcfd this week to 92.6 bcfd next week. That, however, is lower than Refinitiv’s forecast on Monday.
The amount of gas flowing to LNG export plants has averaged 6.7 bcfd so far in October, up from 5.7 bcfd in September, despite several hurricane and maintenance outages this month.
That would be the most in a month since April and puts exports on track to rise for a third month in a row for the first time since February when feedgas hit a record 8.7 bcfd as rising global gas prices prompted buyers to reverse some cargo cancellations.
Prior to that, US exports fell every month from March to July as coronavirus-related demand destruction caused prices in Europe and Asia to collapse and buyers to cancel over 150 cargoes.
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