NEW YORK: US natural gas futures edged up Wednesday on forecasts for cooler weather, more heating demand next week than previously expected, and record liquefied natural gas (LNG) exports.
Prices rose despite a steady increase in daily output to a near seven-month high.
Front-month gas futures rose 2.0 cents, or 0.7%, to settle at $2.712 per million British thermal units. On Tuesday, the contract closed at its lowest level since Oct. 14 for the second day in a row.
Data provider Refinitiv said output in the Lower 48 US states rose to 91.9 billion cubic feet per day (bcfd) on Tuesday, its highest in a day since April.
So far in November, production has averaged 89.6 bcfd, up from a five-month low of 87.4 bcfd in October.
Traders said some of that output increase was due to higher oil prices.
Oil futures have risen about 17% so far this month on expectations global energy demand and economic activity will climb as promising coronavirus vaccines are being developed.
Higher oil prices over the last few months have encouraged energy firms to drill for more crude. Oil wells can produce a lot of associated gas. Even though meteorologists forecast the weather will be cooler next week than previously anticipated, it will still remain unseasonably warm. Refinitiv projected demand, including exports, would drop from 104.1 bcfd this week to 101.3 bcfd next week. That forecast for next week was higher than Refinitiv projected on Tuesday.
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