NEW YORK: US natural gas futures rose to a two-week high on Friday on forecasts for near record liquefied natural gas exports, colder weather and more heating demand in late December. That price increase comes as spot power and gas prices in the US Northeast rose to their highest in a year as a major winter storm blanketed the region in snow this week.
Front-month gas futures rose 6.4 cents, or 2.4%, to settle at $2.700 per million British thermal units, their highest close since December 2. That put the contract up over 4% for the week after it gained less than 1% last week.
Data provider 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.
Refinitiv projected average demand, including exports, would slip from 124.3 bcfd this week to 123.6 bcfd next week as the weather turns milder before rising to 127.8 bcfd in two weeks with the expected arrival of more cold.
The amount of gas flowing to US LNG export plants, meanwhile, has averaged 10.7 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.
Traders, however, noted LNG exports cannot rise much more until new units enter service in the second half of 2022 since feedgas to the LNG plants was already over their 10.5-bcfd export capacity. LNG plants can pull in a little more gas than they can export since they use some of the fuel to run the facility.
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