NEW YORK: US natural gas futures climbed about 3 percent to a one-month high on Wednesday on a recent drop in daily output.
That price increase came despite ample supplies of gas in storage, a small decline in flows to liquefied natural gas (LNG) export plants, mild weather and forecasts for lower demand next week than previously expected.
Front-month gas futures for October delivery on the New York Mercantile Exchange rose 8.0 cents, or 2.7 percent, to USD3.089 per million British thermal units at 8:44 a.m. EDT (1244 GMT), putting the contract on track for its highest close since July 30.
That price increase put the front-month up for a sixth day in a row for the first time since February and pushed it into technically overbought territory for the first time since mid-June. The contract has climbed about 15percent during those six days.
In the tropics, the US National Hurricane Center projected a disturbance in the Atlantic Ocean near the Cape Verde Islands had a 70percent chance of strengthening into a tropical cyclone over the next week as it heads west toward the Caribbean Islands.
Financial firm LSEG said average gas output in the Lower 48 states fell to 107.4 billion cubic feet per day so far in September, down from a record monthly high of 108.3 bcfd in August.
On a daily basis, output was on track to drop to a preliminary seven-week low of 106.1 bcfd on Wednesday, down from a one-week high of 108.5 bcfd on Tuesday. That compares with a daily record high of 109.6 bcfd on July 28. Preliminary data is often revised later in the day.
Record output so far this year has allowed energy companies to inject more gas into storage than usual so far this summer.
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