NEW YORK: US natural gas futures edged up about 1% on Tuesday on record gas flows to liquefied natural gas (LNG) export plants, a drop in daily output and forecasts for cooler weather and higher demand than previously expected next week.
That rise in demand should increase the amount of gas utilities pull from storage next week. Gas stockpiles were currently around 12% below normal levels for this time of year after extreme cold weather in January and February forced energy firms to pull large amounts of gas out of storage, including record amounts in January. [EIA /GAS]
Front-month gas futures for April delivery on the New York Mercantile Exchange rose 2.9 cents, or 0.7%, to $4.047 per million British thermal units (mmBtu) at 8:40 a.m. EDT (1240 GMT). On Monday, the contract closed at its lowest level since February 28.
Financial firm LSEG said average gas output in the Lower 48 US states had risen to 105.8 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.
On a daily basis, output was on track to drop by around 2.7 bcfd to a preliminary three-week low of 104.1 bcfd on Tuesday. Traders noted preliminary data is often updated later in the day.
Meteorologists projected weather in the Lower 48 states would remain mostly near normal through April 2. LSEG forecast average gas demand in the Lower 48, including exports, will rise from 107.4 bcfd this week to 110.5 bcfd next week. The forecast for next week was higher than LSEG’s outlook on Monday.
The amount of gas flowing to the eight big US LNG export plants rose to an average of 15.7 bcfd so far in March, up from a record 15.6 bcfd in February, as new units at Venture Global’s 3.2-bcfd Plaquemines LNG export plant under construction in Louisiana enter service.
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