NEW YORK: US natural gas futures fell over 3% to a one-week low on Wednesday on an afternoon forecast showing slightly milder weather and lower heating demand over the next two weeks than previously expected and rising output over the past month.
That price decline also came ahead of a US Energy Information Administration report on Thursday that is expected to show a smaller-than-usual storage decline during warmer-than-normal weather and the Thanksgiving holiday last week.
Earlier in the day, futures were trading higher as liquefied natural gas (LNG) exports rose to fresh record highs. Front-month gas futures fell 10.0 cents, or 3.5%, to settle at $2.780 per million British thermal units, their lowest close since November 24.
Refinitiv said output in the lower 48 US states averaged 90.8 billion cubic feet per day (bcfd) so far in December. That compares with a seven-month high of 91.0 bcfd in November 2020 and an all-time monthly high of 95.4 bcfd in November 2019. With a seasonal cooling of the weather, Refinitiv projected demand, including exports, would rise from 113.2 bcfd this week to 116.8 bcfd next week.
The amount of gas flowing to US LNG export plants rose to an average of 10.7 bcfd so far in December, which would top November's 9.9-bcfd record high. Those increases come as the third liquefaction train at Cheniere Energy Inc's Corpus Christi plant in Texas prepares to enter commercial service and months of rising prices in Europe and Asia prompt global buyers to purchase more US gas.
Earlier this year, US exports fell each month from March to July as coronavirus-related demand destruction caused prices in Europe and Asia to collapse and buyers to cancel around 185 cargoes.
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