US natgas prices jump on lower output, rising LNG export flows

NEW YORK: US natural gas futures jumped about 6% to a one-month high on Friday on a drop in output in recent weeks and forecasts for more demand next week than previously expected as gas flows to liquefied natural gas (LNG) export plants increase.

Gas futures for June delivery on the New York Mercantile Exchange rose 20.3 cents, or 5.7%, to settle at $3.795 per million British thermal units, their highest close since April 9.

For the week, the front-month gained about 5% after jumping about 24% last week.

Analysts said mild weather expected to last through late May should keep heating and cooling demand low, allowing utilities to continue injecting more gas into storage than normal for this time of year.

Gas stockpiles are currently around 3% above the five-year (2020-2024) normal.

Some analysts said mild weather could allow energy firms to add record amounts of gas into storage in May. The current all-time monthly injection high of 494 billion cubic feet was set in May 2015.

Utilities had pulled a monthly record of 1.013 bcf of gas from storage in January to keep homes and businesses warm during extreme cold weather this winter.

Financial firm LSEG said average gas output in the Lower 48 US states fell to 103.4 billion cubic feet per day so far in May, down from a monthly record of 105.8 bcfd in April.

Since gas output hit a daily record high of 107.4 bcfd on April 18, production was on track to drop about 4.8 bcfd to a preliminary 11-week low of 102.6 bcfd on Friday. Analysts have noted that preliminary data is often revised later in the day.

Looking ahead, analysts said the roughly 15% drop in US crude futures so far in 2025 would likely prompt drillers to cut back on oil production. Any decline in oil production would ultimately reduce the amount of gas pulled out of the ground that is associated with that oil output. About 37% of US gas production comes from associated gas, according to federal energy data.

Over time, analysts said that reduction in gas output should increase gas prices.

Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through May 23.

LSEG forecast average gas demand in the Lower 48, including exports, will slide from 97.1 bcfd this week to 95.5 bcfd next week before rising to 98.2 bcfd. The forecast for next week was higher than LSEG’s outlook on Thursday.

The average amount of gas flowing to the eight big LNG export plants operating in the US fell to 14.9 bcfd so far in May, down from a monthly record of 16.0 bcfd in April.