NEW YORK: US natural gas futures gained on Tuesday as forecasts continued to signal hotter weather over the coming weeks than previously expected, which tends to increase gas demand for cooling.
Front-month gas futures gained 7.7 cents, or about 2%, to $4.012 per million British thermal units by 9:51 a.m. EDT (1351 GMT).
“We’ve got some hot weather in most of the gas-consuming regions of the US, and the market will stay strong as long as the weather remains hot,” said Thomas Saal, senior vice president of energy at StoneX.
“With higher gas prices outside the US LNG exports should remain elevated, while supply ramps up at a slower pace than before, keeping the market tight.”
Data provider Refinitiv projected US demand, including exports, will rise from an average of 90.8 billion cubic feet per day (bcfd) this week to 95 bcfd next week. But that is still slightly below last week’s 95.7 bcfd.
The amount of gas flowing to US LNG export plants averaged 10.8 bcfd in July, up from 10.1 bcfd in June but still below April’s 11.5-bcfd record. Refinitiv said average US production would increase slightly to 92.3 bcfd next week from 92 bcfd this week. That is still well below November’s all-time monthly high of 95.4 bcfd.
With European gas prices near record levels and Asian gas trading over $15 per mmBtu, analysts expect US LNG exports to remain elevated this year.
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