NEW YORK: US natural gas futures held near a 31-month high on Friday on forecasts for hotter weather and higher air conditioning demand over the next two weeks than previously expected.
Front-month gas futures remained unchanged at $4.006 per million British thermal units (mmBtu) at 7:28 a.m. EDT (1128 GMT). On Thursday, the contract closed at its highest since December 2018 for a fourth day in a row.
For the week, the front-month was up about 9percent after holding steady last week, putting the contract on track for its biggest weekly gain since February.
Data provider Refinitiv said US output in the Lower 48 states slipped to 91.5 billion cubic feet per day (bcfd) so far in July, due mostly to pipeline problems in West Virginia earlier in the month. That compares with an average of 92.2 bcfd in June and an all-time high of 95.4 bcfd in November 2019.
Refinitiv projected average gas demand, including exports, would rise from 92.5 bcfd this week to 95.5 bcfd next week and 95.6 bcfd in two weeks as the weather turns hotter than normal. Those forecasts were slightly higher than Refinitiv predicted on Thursday on expectations power generators will burn more gas to meet rising air conditioning demand.
The amount of gas flowing to US liquefied natural gas (LNG) export plants has averaged 10.8 bcfd so far in July, up from 10.1 bcfd in June but still below the record 11.5 bcfd in April.
With European and Asian gas trading near $12 and $14 per mmBtu, respectively, analysts said buyers around the world would keep purchasing all the LNG the United States can produce. US pipeline exports to Mexico, meanwhile, have averaged 6.6 bcfd so far in July, down from a record 6.7 bcfd in June.