US natgas futures rise 2pc on cooler weather forecasts
- The price increased despite a steady rise in daily output to a near seven-month high.
- So far in November, production has averaged 89.6 bcfd, up from a five-month low of 87.4 bcfd in October.
US natural gas futures rose more than 2% on Wednesday on forecasts for cooler weather and more heating demand next week than previously expected.
The price increased despite a steady rise in daily output to a near seven-month high.
Front-month gas futures rose 6.4 cents, or 2.4%, to $2.756 per million British thermal units at 7:53 a.m. EST (1253 GMT). On Tuesday, the contract fell to its lowest since Oct. 14 for the second day in a row.
Data provider Refinitiv said output in the Lower 48 US states rose to 91.9 billion cubic feet per day (bcfd) on Tuesday, its highest since April.
So far in November, production has averaged 89.6 bcfd, up from a five-month low of 87.4 bcfd in October.
Traders said some of that output increase was due to higher oil prices. Oil futures have risen about 18% so far this month on expectations global energy demand and economic activity will climb as promising coronavirus vaccines are being developed. Higher oil prices over the last few months have encouraged energy firms to drill for more crude. Oil wells can produce a lot of associated gas.
Even though meteorologists forecast the weather will be cooler next week than previously expected, it will remain unseasonably warm. Refinitiv projected demand, including exports, would drop from 104.1 bcfd this week to 101.3 bcfd next week. The forecast for next week was higher than Refinitiv projected on Tuesday.
The amount of gas flowing to US LNG export plants has averaged 10.0 bcfd so far in November, up from a five-month high of 7.7 bcfd in October, as rising prices in Europe and Asia in recent months have prompted global buyers to purchase more US gas.
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