NEW YORK: US natural gas futures edged up to a fresh one-week high on Tuesday on a drop in output in recent weeks due to pipeline problems and a recent increase in flows to liquefied natural gas export plants with the expected return of a liquefaction train at Freeport LNG’s facility in Texas.
Front-month gas futures for November delivery on the New York Mercantile Exchange rose 1.9 cents, or 0.6 percent, to USD3.085 per million British thermal units (mmBtu), putting the contract on track for its highest close since September 25 for a third day in a row.
In a sign the market is not too worried about gas supplies this winter, the premium of futures for December over November fell to a record low of around 28 cents per mmBtu.
In the US West, meanwhile, extreme heat and heavy air conditioning usage boosted next-day power prices at the South Path-15 (SP-15) hub in Southern California by 10 percent to a 28-month high of around USD87 per megawatt hour. That compares with an average of USD24 so far in 2026, USD28 in 2025 and USD53 over the past five years (2021-2025).
High temperatures in Los Angeles, the second-biggest US city, could top 100 degrees Fahrenheit (37.8 degrees Celsius) for a fifth day in a row on Tuesday, according to meteorologists at AccuWeather. That compares with a normal high of 80 F in the City of Angels for this time of year.
In the Gulf of Mexico, the US National Hurricane Center said there was a 90 percent chance a cyclone could form over the next seven days.
Even though storms can boost US gas prices by cutting output along the US Gulf Coast, they are more likely to reduce prices by shutting liquefied natural gas export plants and knocking out power to homes and businesses. About 40 percent of the power generated in the US comes from gas-fired plants.
Financial firm LSEG said average gas output in the US Lower 48 states slid to 111.7 billion cubic feet per day (bcfd) so far in October, down from record highs of 113.3 in both August and September.
On a daily basis, output was on track to fall even further to a four-month low of 108.9 bcfd on Tuesday due in part to recent forces majeures and other problems on several pipelines in Kentucky, Texas, West Virginia and elsewhere.
LSEG said average gas demand in the Lower 48 states, including exports, will slide from 106.3 bcfd this week to 104.5 bcfd next week. The forecast for next week was lower than LSEG’s outlook on Monday.
Average gas flows to the nine large US LNG export plants fell to 16.9 bcfd so far in October, down from 17.9 bcfd in September and the monthly record high of 18.8 bcfd in April.
On a daily basis, however, LNG feedgas was on track to rise to a one-week high of 17.6 bcfd on Tuesday with the amount of gas flowing to Freeport LNG in Texas expected to rise. Flows to Freeport had been expected to rise on Monday but that was delayed until Tuesday, according to the latest LSEG data.