US natgas jumps over 5pc on small storage build, cold forecasts

US natural gas futures rose over 5% on Thursday on forecasts for colder weather and more heating demand over the next two weeks and a smaller-than-expected storage build.

That price increase came despite a rise in output with Gulf Coast wells returning after Hurricane Delta and an increase in gas flows to liquefied natural gas (LNG) export plants.

The US Energy Information Administration said US utilities injected 46 billion cubic feet (bcf) of gas into storage in the week ended Oct. 9.

That is lower than the 55-bcf build analysts forecast in a Reuters poll and compares with an increase of 102 bcf during the same week last year and a five-year (2015-19) average build of 87 bcf.

The increase boosted stockpiles to 3.877 trillion cubic feet (tcf), 10.0% above the five-year average of 3.524 tcf for this time of year and keeps inventories on track to reach a record over 4.0 tcf by the end of October.

After falling almost 8% in the prior session, front-month gas futures rose 13.9 cents, or 5.3%, to settle at $2.775 per million British thermal units.

Data provider Refinitiv said output in the Lower 48 US states jumped to 87.0 billion cubic feet per day (bcfd) on Wednesday 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 85.2 bcfd this week to 91.6 bcfd next week. That is higher than Refinitiv's forecast on Wednesday.

The amount of gas flowing to LNG export plants has averaged 6.8 bcfd so far in October, up from 5.7 bcfd in September, despite several hurricane and maintenance outages this month.