NEW YORK: US natural gas futures jumped about 9% to a one-year high on Monday on forecasts for colder weather, rising gas flows to US liquefied natural gas export plants and soaring global gas prices.
On its second to last day as the front-month, gas futures for December delivery on the New York Mercantile Exchange (NYMEX0 rose 27.3 cents, or 8.7%, to $3.402 per million British thermal units (mmBtu) at 10:12 a.m. EST (1512 GMT), putting the contract on track for its highest close since November 2023.
Futures for January, which will soon be the front-month, were up about 22 cents per mmBtu to $3.51.
That leaves the premium of futures for January over December at around 12 cents per mmBtu, the lowest since February 2022.
With gas futures up about 39% over the past five weeks, speculators last week cut their net short futures and options positions on the New York Mercantile and Intercontinental Exchanges to the lowest since mid-October, according to the US Commodity Futures Trading Commission’s Commitments of Traders report.
Total gas futures volume traded on the NYMEX, meanwhile, jumped to 1.007 million on Nov. 21, the highest since March 2020.
In other news, EQT, the second biggest US gas producer, said asset manager Blackstone would buy minority stakes in some of EQT’s pipelines for $3.5 billion in cash through a joint venture.
Financial firm LSEG said average gas output in the Lower 48 US states edged up to 101.2 billion cubic feet per day so far in November, up from 101.1 bcfd in October. That compares with a record 105.3 bcfd in December 2023. On a daily basis, output hit a three-month high of 103.4 bcfd on Saturday.
Analysts expect producers to boost output in 2025 following a series of production cuts this year, as rising demand from LNG export plants increases prices.
Annual average gas prices at the US Henry Hub benchmark in Louisiana were expected to rise over 40% in 2025 after dropping to a four-year low in 2024, analysts projected.
Meteorologists projected weather in the Lower 48 will remain mostly near normal through Dec. 10 except for several colder-than-normal days from Nov. 29-Dec. 4.
With colder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would jump from 115.4 bcfd this week to 132.4 bcfd next week. Those forecasts were lower than LSEG’s outlook on Friday.
The amount of gas flowing to the seven big operating US LNG export plants rose to an average of 13.5 bcfd so far in November, up from 13.1 bcfd in October. That compares with a monthly record high of 14.7 bcfd in December 2023.
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