- The price increase came despite a mostly steady rise in output this month.
- Traders said some of that output increase was due to higher oil prices.
US natural gas futures rose over 2% on Friday, buoyed by record-high liquefied natural gas (LNG) exports and forecasts for cooler weather and higher heating demand in early December.
The price increase came despite a mostly steady rise in output this month.
Front-month gas futures rose 5.8 cents, or 2.2%, to settle at $2.650 per million British thermal units. On Thursday, the contract marked its lowest close since Oct. 6.
For the week, the front-month was down about 11% after rising almost 4% last week.
Data provider Refinitiv said output in the Lower 48 US states averaged 89.8 billion cubic feet per day (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 monthly high of 95.4 bcfd in November 2019.
Traders said some of that output increase was due to higher oil prices. Oil futures have risen about 17% so far this month on expectations of a rebound in global energy demand and economic activity as promising coronavirus vaccines are being developed.
Higher oil prices over the last few months have encouraged energy firms to drill for more crude. Those oil wells also produce a lot of associated gas.
Refinitiv projected demand, including exports, would drop from 103.3 bcfd this week to 99.5 bcfd next week as the weather turns unseasonably warm before jumping to 109.6 bcfd in two weeks with a drop in temperatures.
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.