US natgas futures rise on record LNG exports, cold weather

US natural gas futures edged up on Monday on record liquefied natural gas (LNG) exports and forecasts for colder weather and higher heating demand through mid December.

Front-month gas futures rose 3.9 cents to settle at $2.882 per million British thermal units.

That put the front-month down about 13% in November, its biggest monthly decline since January. Last month, the contract gained almost 33%.

Data provider Refinitiv said output in the Lower 48 US states averaged 90.5 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 were up about 27% so far this month on expectations of a rebound in global energy demand and economic activity as promising coronavirus vaccines are being developed.

Rising 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.

With the seasonal cooling of the weather, Refinitiv projected demand, including exports, would rise from 113.2 bcfd this week to 119.1 bcfd next week.

The amount of gas flowing to US LNG export plants averaged 9.8 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.

That matches the 9.8-bcfd US LNG export capacity and compares with an all-time monthly high for feedgas of 8.7 bcfd in February.