NEW YORK: US natural gas futures rose on Friday, posting their fourth straight weekly gain as unseasonably warm weather boosted cooling demand.
Front-month gas futures for October delivery on the New York Mercantile Exchange settled 2.1percent higher at USD2.975 per million British thermal units (mmBtu). The contract was up about 2.4percent for the week.
“There’s still some unseasonably warm weather that’s given us a little bit of a bounce today. We saw a lot of demand because of the heat in the East and the Midwest, and that pulled a little bit of the inventory…today, it’s all about the heat,” said Phil Flynn, senior market analyst at Price Futures Group.
Above-average temperatures across parts of the Midwest and eastern US kept cooling demand high, pushing power generators to continue burning more gas than usual to keep air conditioners running. About 40percent of US power generation comes from gas-fired plants.
“The gradual up-trend of the past month … driven by unusually hot late summer temperatures, could continue in the coming weeks… All in all, a bullish stance remains warranted,” analysts at consulting firm Gelber & Associates said in a note.
The UN weather agency said its forecasts showed a near 100percent likelihood that El Niño would persist through February 2027, fueled by exceptionally warm Pacific Ocean temperatures.
The US Energy Information Administration said energy firms added 30 billion cubic feet of gas to storage during the week ended August 28.
That was in line with the 31-bcf build analysts forecast in a Reuters poll and compares with an increase of 50 bcf during the same week last year and a five-year (2021-2025) average increase of 37 bcf for the period.
Financial firm LSEG said average gas output in the US Lower 48 states rose to 112.9 billion cubic feet per day (bcfd) so far in September, up from a monthly high of 112.2 bcfd in August.
LSEG projected average gas demand in the Lower 48 states, including exports, would slide to 107.6 bcfd next week from 109.7 bcfd this week. Average gas flows to the nine big US LNG export plants rose to 18.1 bcfd so far in September from 17.2 bcfd in August, according to LSEG data. That is still short of the monthly record high of 18.8 bcfd in April.
Benchmark Dutch and British wholesale gas prices eased on Friday morning but remain near their highest levels since January 2023 as the market continues to assess how Europe’s low storage situation and competition for liquefied natural gas (LNG) will shape prices this winter.
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