NEW YORK: US natural gas futures traded within a few cents of a 20-month high on Thursday on a slightly smaller than expected weekly storage build and as liquefied natural gas (LNG) exports keep rising. Gas prices have also soared in recent days as output slowed and on forecasts for colder weather and higher heating demand over the next two weeks.
The US Energy Information Administration (EIA) said US utilities injected 49 billion cubic feet (bcf) of gas into storage in the week ended Oct. 16. That was slightly lower than the 52-bcf build analysts forecast in a Reuters poll and compares with an increase of 92 bcf during the same week last year and a five-year (2015-19) average build of 75 bcf.
The increase boosted stockpiles to 3.926 trillion cubic feet (tcf), 9.1% above the five-year average of 3.599 tcf for this time of year and keeps overall inventories on track to get close to a record high over 4.0 tcf by the end of October.
Front-month gas futures fell 1.6 cents, or 0.5%, to settle at $3.007 per million British thermal units (mmBtu). On Wednesday, the contract closed at its highest since January 2019, putting it up about 68% from a recent low of $1.795 on Sept. 21.
Data provider Refinitiv said output in the Lower 48 US states averaged 86.3 billion cubic feet per day (bcfd) so far in October. That would be the lowest in a month since September 2018 and puts output on track to drop for a fourth month in a row for the first time since June 2016, according to Refinitiv and federal energy data. Output hit an all-time high of 95.4 bcfd in November 2019.
As LNG exports rise and the weather turns colder, Refinitiv projected average demand would jump from 90.0 bcfd this week to 98.2 bcfd next week. The amount of gas flowing to LNG export plants has averaged 7.1 bcfd so far in October, up from 5.7 bcfd in September.
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