US natgas rises to 5-week high on higher LNG exports, hurricane worries
- Front-month gas futures rose 17.7 cents, or 7.3%, to settle at $2.615 per million British thermal units, its highest close since Aug. 31.
- Data provider Refinitiv said output in the Lower 48 US states averaged 86.8 billion cubic feet per day (bcfd) so far in October........
US natural gas futures jumped over 7% to a five-week high on Monday as liquefied natural gas (LNG) exports rise and worries production could be shut in again later this week with another hurricane expected in the Gulf of Mexico.
Tropical Storm Delta is expected to strengthen into a hurricane before slamming into the Gulf Coast between Louisiana and Florida on Friday.
Front-month gas futures rose 17.7 cents, or 7.3%, to settle at $2.615 per million British thermal units, its highest close since Aug. 31.
Despite the rise in the futures, spot gas prices for Monday fell to their lowest in years in several regions of the United States and Canada as mild weather and coronavirus demand destruction cut usage of the fuel for heating and industrial purposes.
Gas speculators, meanwhile, boosted their net long positions on the New York Mercantile and Intercontinental Exchanges last week for a second week in three on expectations energy demand will rise as the economy rebounds once state governments lift more coronavirus-linked lockdowns.
Data provider Refinitiv said output in the Lower 48 US states averaged 86.8 billion cubic feet per day (bcfd) so far in October, down from a four-month low of 87.2 bcfd in September.
Those production declines come as low prices earlier in the year due to coronavirus demand destruction caused energy firms to shut wells and cut back on new drilling so much that output from new wells no longer offsets existing well declines.
With milder weather coming, Refinitiv projected demand, including exports, would slip from 86.8 bcfd this week to 86.4 bcfd next week. That, however, was higher than Refinitiv's forecasts on Friday.
The amount of gas flowing to LNG export plants averaged 7.1 bcfd so far in October, up from 5.7 bcfd in September as vessels started returning to Cameron in Louisiana.
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