NEW YORK: US natural gas futures rose about 2% to a 15-week high on Tuesday on forecasts for warmer weather over the next two weeks than previously expected, which should cause power generators to burn more gas to keep air conditioners humming.
Traders noted that the price increase coincided with record pipeline exports to Mexico despite lower liquefied natural gas (LNG) exports due to short-term maintenance issues.
Front-month gas futures were up 5.4 cents, or 1.8%, to $3.124 per million British thermal units at 7:57 a.m. EDT (1157 GMT), putting the contract on track for its highest close since Feb. 17.
Data provider Refinitiv said gas output in the Lower 48 US states had averaged 91.7 billion cubic feet per day (bcfd) so far in June, up from 91.0 bcfd in May but still well below the monthly record high of 95.4 bcfd in November 2019.
With warmer weather on the horizon, Refinitiv projected average gas demand, including exports, would rise from 87.8 bcfd this week to 89.7 bcfd next week. The forecast for next week was higher than Refinitiv predicted on Monday on expectations for rising air conditioning use.
The amount of gas flowing to US LNG export plants has slid to an average of 9.9 bcfd so far in June, down from 10.8 bcfd in May and the all-time high of 11.5 bcfd in April. Traders noted LNG feedgas was down due to short-term maintenance work at the Sabine Pass and Cameron export plants in Louisiana and Corpus Christi in Texas and some pipelines that provide them with fuel.