US natural gas futures rise on output decline, increased LNG flows

NEW YORK: US natural gas futures climbed about 2percent on Tuesday on a small decline in output, along with increases in gas flows to liquefied natural gas (LNG) export plants and forecasts for more demand this week than previously expected.

That small price increase came despite forecasts for the weather to turn warmer than normal through mid-February, and for lower demand next week than previously expected.

Gas futures for March delivery on the New York Mercantile Exchange rose 4.9 cents, or 1.5percent, to USD3.286 per million British thermal units (mmBtu). On Monday, the contract closed at its lowest since January 16.

Gas futures soared 140percent between January 20 and 28 as extreme cold boosted heating demand to near-record highs and cut output to a two-year low by freezing oil and gas wells, before dropping 57percent from January 29-February 2 as warmer weather thawed wells and boosted output.

Those massive price changes boosted historic or actual 30-day close-to-close futures volatility to a record high for a third day in a row, reaching 258.1percent on Monday and Tuesday.