US natural gas futures climbed to a one-week high on Tuesday on forecasts for cooler weather and more heating demand during the first week of December than previously expected.
On its second to last day as the front-month, gas futures for December delivery rose 6.4 cents, or 2.4%, to settle at $2.775 per million British thermal units (mmBtu), their highest close since Nov. 13.
The January contract, which will soon be the front-month, gained 6 cents to $2.89 per mmBtu.
Data provider Refinitiv said output in the Lower 48 US states averaged 90.3 billion cubic feet per day (bcfd) so far in November, up from a five-month low of 87.4 bcfd in October.
Traders said some of that output increase was due to higher oil prices. Oil futures were up about 21% so far this month on expectations of a rebound in global energy demand and economic activity as promising coronavirus vaccines are being developed.
Rising oil prices over the last few months have encouraged energy firms to drill for more crude. Those oil wells also produce a lot of associated gas.
With the weather expected to cool, Refinitiv projected demand, including exports, would rise from 100.3 bcfd this week to 114.4 bcfd next week.
The amount of gas flowing to US liquefied natural gas (LNG) export plants has averaged 9.9 bcfd so far in November, up from a five-month high of 7.7 bcfd in October, as rising prices in Europe and Asia in recent months have prompted global buyers to purchase more US gas.
That tops the 9.8-bcfd US LNG export capacity and compares with an all-time monthly high for feedgas of 8.7 bcfd in February. LNG plants can pull in a little more gas than they can export since they use some of the fuel to run the facility.