US natgas futures jump over 4pc on big storage draw

US natural gas futures jumped over 4% on Thursday on a bigger-than-expected storage draw and forecasts for cooler weather and higher than anticipated heating demand over the next two weeks.

The US Energy Information Administration said utilities pulled 91 billion cubic feet (bcf) of gas from storage during the week ended Dec. 4. Analysts said that big draw was likely due to record liquefied natural gas (LNG) exports and a small decline in output last week.

That was higher than the 83-bcf decline analysts forecast in a Reuters poll and compares with a decrease of 57 bcf during the same week last year and a five-year (2015-19) average withdrawal of 61 bcf.

Front-month gas futures rose 11.1 cents, or 4.5%, to settle at $2.553 per million British thermal units. That was the biggest daily percentage increase since Oct. 29.

Data provider Refinitiv said output in the Lower 48 US states averaged 90.8 billion cubic feet per day 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.

Even though the weather is expected to remain milder than normal into late December, the latest forecasts called for slightly cooler temperatures over the next two weeks. That prompted Refinitiv to project demand, including exports, would rise more than previously expected to 120.4 bcfd next week from 118.6 bcfd this week.

The amount of gas flowing to US LNG export plants, meanwhile, rose to an average of 10.8 bcfd so far in December, which would top November's 9.8-bcfd record.

That increase comes as the third train at Cheniere Energy Inc's Corpus Christi LNG plant in Texas prepares to enter commercial service and as rising prices in Europe and Asia prompt buyers to purchase more US gas.