NEW YORK: US natural gas futures rose to a near three-week high on Tuesday on forecasts for colder weather that could result in more heating demand over the next two weeks.
Front-month gas futures were up 7.9 cents, or 2.9%, at $2.784 per million British thermal units by 10:24 a.m. EST (1524 GMT), after hitting their highest since Dec. 2 at $2.791 earlier in the session.
“Looks like the weather forecasts are getting a bit chillier with the recent snowstorm, with forecasts suggesting a little colder weather, prices are firming up a bit,” said Thomas Saal, senior vice president of energy at StoneX.
Data provider Refinitiv estimated 430 heating degree days (HDDs) over the next two weeks in the lower 48 US states. The normal is 456 HDDs for this time of year.
HDDs measure the number of degrees a day’s average temperature is below 65 degrees Fahrenheit (18 degrees Celsius). The measure is used to estimate demand to heat homes and businesses.
With colder weather coming, Refinitiv projected demand, including exports, would rise to an average of 128.8 bcfd this week from 124.3 bcfd in the prior week and would further increase to an average of 132.0 bcfd in the next week.
Output in the Lower 48 US states has averaged 90.9 billion cubic feet per day (bcfd) so far in December. That compares with a seven-month high of 91.0 bcfd in November 2020 and an all-time monthly high of 95.4 bcfd in November 2019.
The amount of gas flowing to US LNG export plants, meanwhile, has averaged 10.7 bcfd so far in December, which would top November’s 9.8-bcfd record.
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