NEW YORK: US natural gas futures were little changed on Wednesday as record liquefied natural gas (LNG) exports offset forecasts for milder weather and lower heating demand in mid-November and a steady rise in output.
Front-month gas futures for December delivery slipped 1.3 cents to settle at $3.046 per million British thermal units. That put the contract down about 9% since hitting a 21-month high of $3.396 on Oct. 30 and lower for a third day in a row for the first time since early September.
Those front-month declines caused the premium of the December 2021 contract over December 2020 to rise to its highest since April 2011. Data provider Refinitiv said output in the Lower 48 US states rose to an 11-week high of 90.3 billion cubic feet per day (bcfd) on Tuesday, up 4.8 bcfd since Hurricane Zeta hit the Gulf Coast on Oct. 28 as energy firms restored output from Gulf of Mexico wells shut ahead of the storm.
Output averaged 89.6 bcfd so far in November, up from a five-month low of 87.4 bcfd in October. That, however, was still well below the all-time high of 95.4 bcfd in November 2019.
Production declined earlier this year as low prices due to coronavirus demand destruction caused energy firms to shut oil and gas wells and cut drilling by so much that output from new wells no longer offsets existing well declines.
With milder weather coming, Refinitiv projected demand, including exports, would drop from an average of 96.7 bcfd this week to 93.2 bcfd next week. That forecast is lower than Refinitiv expected on Tuesday.
The amount of gas flowing to LNG export plants hit a record 10.2 bcfd on Tuesday as rising global prices over the past couple of months prompted buyers in Europe and Asia to purchase more US gas.
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