NEW YORK: US natural gas futures climbed about 3percent to a one-week high on Wednesday on record flows to liquefied natural gas (LNG) export plants, the expiration of a lower-priced contract, and forecasts for colder weather and higher demand this week than previously expected.
That price increase came ahead of a federal report expected to show energy firms pulled less gas from storage last week than usual for this time of year, and amid record output, ample amounts of gas in storage, and lower gas prices in Europe on Ukraine peace talks.
On its first day as the front-month, gas futures for January delivery on the New York Mercantile Exchange rose 11.8 cents, or 2.6percent, to USD4.599 per million British thermal units (mmBtu), putting the contract on track for its highest close since November 13.
On Tuesday, when December futures were still the front-month, the contract closed at its lowest since November 18.
Analysts forecast energy firms pulled 2 billion cubic feet (bcf) of gas out of storage during the week ended November 21.
That compares with a decline of two bcf during the same week last year and an average withdrawal of 25 bcf over the past five years (2020-2024).
LSEG said average gas output in the Lower 48 states rose to 109.7 billion cubic feet per day (bcfd) so far in November, up from 107.4 bcfd in October and a record monthly high of 108.3 bcfd in August.
Record output this year has allowed energy companies to stockpile more gas than usual, with about 5 percent more gas in storage than is normal for this time of year.
Meteorologists forecast temperatures across the country will remain mostly colder than normal through December 11.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 122.6 bcfd this week to 140.1 bcfd next week. The forecast for this week was higher than LSEG’s outlook on Tuesday, while its forecast for next week was lower.
Average gas flows to the eight big LNG export plants operating in the US rose to 18.1 bcfd so far this month, up from a record 16.6 bcfd in October.