NEW YORK: US natural gas futures climbed about 2percent on Monday on a drop in daily output, an increase in daily liquefied natural gas exports and a 4percent jump in oil futures.
Front-month gas futures for October delivery on the New York Mercantile Exchange rose 5.2 cents, or 1.8percent, to USD2.883 per million British thermal units.
Oil prices rose over 4percent on Monday after new strikes on Saudi Arabian energy infrastructure and attacks on ships in the Middle East compounded supply concerns.
Financial firm LSEG said average gas output in the US Lower 48 states rose to 113.4 billion cubic feet per day (bcfd) so far in September, up from a monthly record high of 112.2 bcfd in August.
On a daily basis, however, output was on track to decline to a two-week low of 112.8 bcfd on Monday.
Record output and mild spring weather have allowed energy firms to keep the amount of gas in inventory above the five-year (2021-2025) average since March.
But with hotter-than-normal weather last week, analysts said the amount of gas in storage likely slid to 3.6percent above normal during the week ended September 11, down from 4.8percent above normal in the previous week, according to estimates ahead of Thursday’s weekly federal inventory report.
Meteorologists forecast the weather would remain mostly warmer than normal through September 29 — though not as hot as previously expected — 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.
LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 109.5 bcfd this week to 107.3 bcfd next week. Those forecasts were lower than LSEG’s outlook on Friday.
Average gas flows to the nine big US LNG export plants rose to 18.3 bcfd so far in September, up from 17.2 bcfd in August, but remained short of the monthly record high of 18.8 bcfd in April.
On a daily basis, LNG feedgas was on track to rise to a 20-week high of 18.7 bcfd on Friday.
US energy firm Berkshire Hathaway Energy, however, has told customers that it plans to shut its 0.8-bcfd Cove Point LNG export plant in Maryland for a couple of weeks of annual maintenance starting around September 19.