AGL 8.30 Decreased By ▼ -0.03 (-0.36%)
ANL 10.95 Increased By ▲ 0.25 (2.34%)
AVN 79.70 Increased By ▲ 1.51 (1.93%)
BOP 5.75 Increased By ▲ 0.18 (3.23%)
CNERGY 5.64 Increased By ▲ 0.26 (4.83%)
EFERT 79.36 Increased By ▲ 0.71 (0.9%)
EPCL 67.48 Decreased By ▼ -0.31 (-0.46%)
FCCL 14.89 Increased By ▲ 0.39 (2.69%)
FFL 6.70 Increased By ▲ 0.10 (1.52%)
FLYNG 7.16 Increased By ▲ 0.13 (1.85%)
GGGL 11.60 Increased By ▲ 0.26 (2.29%)
GGL 17.51 Increased By ▲ 0.27 (1.57%)
GTECH 8.35 Increased By ▲ 0.05 (0.6%)
HUMNL 7.17 Increased By ▲ 0.11 (1.56%)
KEL 3.14 Increased By ▲ 0.06 (1.95%)
LOTCHEM 35.20 Increased By ▲ 2.33 (7.09%)
MLCF 28.35 Increased By ▲ 0.05 (0.18%)
OGDC 87.70 Increased By ▲ 3.15 (3.73%)
PAEL 16.63 Increased By ▲ 0.18 (1.09%)
PIBTL 6.05 Increased By ▲ 0.20 (3.42%)
PRL 19.46 Increased By ▲ 1.34 (7.4%)
SILK 1.14 No Change ▼ 0.00 (0%)
TELE 11.41 Increased By ▲ 0.31 (2.79%)
TPL 9.20 Increased By ▲ 0.20 (2.22%)
TPLP 20.25 Increased By ▲ 0.37 (1.86%)
TREET 27.10 Increased By ▲ 0.48 (1.8%)
TRG 96.20 Increased By ▲ 1.70 (1.8%)
UNITY 20.85 Increased By ▲ 0.48 (2.36%)
WAVES 13.90 Increased By ▲ 0.27 (1.98%)
WTL 1.34 Increased By ▲ 0.03 (2.29%)
BR100 4,275 Increased By 67 (1.59%)
BR30 15,794 Increased By 348.3 (2.26%)
KSE100 42,872 Increased By 628.4 (1.49%)
KSE30 16,219 Increased By 247.6 (1.55%)

US natural gas up 4% on forecasts cooler weather will boost heating

  • Front-month gas futures rose 20.6 cents, or 4.0%, to $5.321 per million British thermal units (mmBtu)
Published October 22, 2021

US natural gas futures climbed about 4% to a one-week high on Friday on forecasts for demand to rise as the weather turns seasonally cooler and a slight increase in global gas prices that should keep demand for US liquefied natural gas (LNG) strong.

Even though the forecasts called temperatures to decline with the approach of winter, those forecasts also predicted the weather would remain milder than normal through at least early November, keeping heating demand lower than usual for this time of year.

Front-month gas futures rose 20.6 cents, or 4.0%, to $5.321 per million British thermal units (mmBtu) at 8:07 a.m. EDT, putting the contract on track for its highest close since Oct. 15.

For the week, however, the front-month was still off about 2%, which would put it down for a third week in a row for the first time since March.

US natural gas futures slide 2% on mild forecasts, healthy stockpiles

In early October, US gas prices soared to their highest since 2008 on expectations global competition for LNG would keep demand for US exports strong. But after weeks of mild weather, US prices were down about 18% from that high amid a growing belief in the market that the United States will have more than enough gas in storage for the winter heating season.

Analysts expect US gas inventories will reach 3.6 trillion cubic feet (tcf) by the start of the winter heating season in November, which they said would be a comfortable level even though it falls short of the 3.7 tcf five-year average.

In Europe, analysts say stockpiles were about 15% below normal for this time of year.

Around the world, however, gas prices were still at or near record highs as utilities scramble to refill dangerously low gas inventories in Europe and meet insatiable demand in Asia. Shortages of coal, gas and oil have already caused power blackouts in China and several businesses in Europe and Asia to shut or curtail manufacturing activities.

Data provider Refinitiv said output in the US Lower 48 states rose to an average of 92.1 billion cubic feet per day (bcfd) so far in October, up from 91.1 bcfd in September. That compares with a monthly record of 95.4 bcfd in November 2019.

Refinitiv projected average US gas demand, including exports, would rise from 86.2 bcfd this week to 87.7 bcfd next week and 90.4 bcfd in two weeks as more homes and businesses start to turn on their heaters. Those forecasts were similar to Refinitiv estimates on Thursday.

Refinitiv said the amount of gas flowing to US LNG export plants averaged 10.4 bcfd so far in October, the same as in September, and was expected to rise in coming weeks as some liquefaction trains exit maintenance outages.

With gas prices near $30 per mmBtu in Europe and $33 in Asia, versus just $5 in the United States, traders said buyers around the world will keep purchasing all the LNG the United States could produce.

But no matter how high global gas prices rise, the United States only has capacity to turn about 10.5 bcfd of gas into LNG.

Global markets will have to wait until later this year to get more, when the sixth liquefaction train at Cheniere Energy Inc's Sabine Pass and Venture Global LNG's Calcasieu Pass in Louisiana are expected to start producing LNG in test mode.


Comments are closed.