US natural gas futures edged up on Friday with the coming of seasonally colder weather and as liquefied natural gas (LNG) exports climbed to record highs.
That US price increase came despite a 3% decline in European gas prices, near record US gas production and healthy US stockpiles for the winter.
US LNG exports were rising just in time to help Europe refill gas stockpiles.
Gas prices at the Title Transfer Facility (TTF) in the Netherlands were up almost 20% this week on worries Russian gas company Gazprom PAO may not deliver enough fuel to Europe this winter. Those worries came after Germany's energy regulator suspended the approval process for Gazprom's Nord Stream 2 gas pipeline from Russia to Germany.
Global gas prices hit record highs over the past couple of months as utilities around the world scramble for LNG cargoes to replenish extremely low stockpiles in Europe and meet insatiable demand in Asia, where energy shortfalls have caused power blackouts in China.
Following those global gas prices, US futures climbed to a 12-year high in early October on expectations LNG demand would remain strong for months. But overseas prices were still trading over six times higher than US futures because the United States has plenty of gas in storage and ample production.
Analysts have said European inventories were about 17% below normal for this time of year, compared with just 2% below normal in the United States.
Front-month gas futures rose 4.4 cents, or 0.9%, to $4.946 per million British thermal units (mmBtu) at 8:49 a.m. EST.
For the week, the US contract was up about 3% after dropping about 13% last week.
Data provider Refinitiv said output in the US Lower 48 states averaged 96.0 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October and the monthly record of 95.4 bcfd in November 2019.
Refinitiv projected average US gas demand, including exports, would jump from 104.8 bcfd this week to 111.4 bcfd next week and 114.8 bcfd as the weather turns seasonally colder and homes and businesses crank up their heaters. The forecast for next week was lower than Refinitiv's forecast on Thursday.
US exports to Canada averaged 3.1 bcfd so far in November, up from 2.1 bcfd in October, according to Refinitiv. That compares with an all-time monthly high of 3.5 bcfd in December 2019.
The amount of gas flowing to US LNG export plants averaged 11.1 bcfd so far in November, up from 10.5 bcfd in October as the sixth train at Cheniere Energy Inc's Sabine Pass plant in Louisiana started producing LNG in test mode. That compares with a monthly record of 11.5 bcfd in April.
On a daily basis, feed gas to the LNG plants was on track to reach 12.03 bcfd on Friday, which would top the current record daily high of 11.99 bcfd in late March.