US natural gas jumps to fresh 30-month high on soaring global prices

US natural gas futures jumped almost 4% to a fresh 30-month high on Tuesday as global gas continues to trade more than three times above US prices, keeping demand for American exports high.

Traders noted gas futures rose despite forecasts for slightly milder weather and less air conditioning demand in the United States over the next two weeks than previously expected.

On its first day as the front-month, gas futures for August delivery rose 14.1 cents, or 3.9%, from Monday's close to $3.734 per million British thermal units (mmBtu) by 8:49 a.m. EDT (1249 GMT), putting the contract on track for its highest close since December 2018 for a second day in a row.

That put the contract up 3.1% from where the July contract closed on Monday when it was the front-month.

It also puts the front-month on track to rise for a sixth day in a row for the first time since August 2018.

In the power market, prices in the Pacific Northwest eased with the Mid Columbia (Mid C) hub in Washington state down to $146 per megawatt hour for Tuesday from $334 for Monday as a brutal heatwave eases.

High temperatures in Seattle, the biggest city in the US Pacific Northwest, will reach 92 degrees Fahrenheit (33 Celsius), down from a record 104 F on Monday, according to forecasts by AccuWeather. That compares with a normal high of just 73 F at this time of year.

Data provider Refinitiv said gas output in the Lower 48 US states averaged 91.6 billion cubic feet per day (bcfd) so far in June, up from 91.0 bcfd in May but still well below the monthly record high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would slide from 93.6 bcfd this week to 90.9 bcfd next week as the weather turns milder. The forecast for next week was lower than Refinitiv projected on Monday.

The amount of gas flowing to US liquefied natural gas (LNG) export plants slipped to an average of 10.1 bcfd so far in June due mostly to short-term maintenance at Gulf Coast facilities and the pipelines that supply them with fuel. That compares with averages of 10.8 bcfd in May and a record 11.5 bcfd in April.

But with European and Asian gas both trading over $11 per mmBtu, analysts said they expect buyers around the world to keep purchasing all the LNG the United States can produce. The Title Transfer Facility (TTF) in the Netherlands, the European gas benchmark, was at its highest since November 2008.

US pipeline exports to Mexico, meanwhile, averaged 6.7 bcfd so far in June, putting them on track to top May's 6.2-bcfd record.