NEW YORK: US natural gas futures edged up to a fresh 16-week high on Wednesday on forecasts for hotter weather over the next two weeks than previously expected.
Despite the hotter forecast, overall demand for gas over the next two weeks was expected to be down a bit on lower liquefied natural gas (LNG) exports related to maintenance issues at some Gulf Coast terminals and the pipelines feeding gas to them.
In addition, traders noted the higher cost of gas would likely cause power generators to burn more coal and less gas to keep air conditioners humming.
Front-month gas futures rose 2.8 cents, or 0.9%, to $3.156 per million British thermal units at 9:21 a.m. EDT (1321 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 87.7 bcfd this week to 89.2 bcfd next week. Those forecasts were lower than Refinitiv forecast on Tuesday.
The amount of gas flowing to US LNG export plants slid to an average of 9.8 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 at the Sabine Pass and Cameron export plants in Louisiana and Corpus Christi in Texas as well as some pipelines that provide them with fuel.
But with European and Asian gas prices trading over $10 per mmBtu, analysts said they expect buyers around the world to keep purchasing all the LNG the United States can produce. Prices at the Title Transfer Facility (TTF) in the Netherlands, the European gas benchmark, hit their highest since March 2014.