NEW YORK: US natural gas futures jumped by more than 5% on Monday to within touching distance of the key $10 per mmBtu level, with gains driven by a strong demand outlook, record prices in Europe and concerns over availability of the fuel. Front-month gas futures rose 34 cents, or 3.6%, to $9.676 per million British thermal units (mmBtu) by 9:50 a.m. EDT (1350 GMT), after jumping nearly 7% to $9.982, a 14-year high, earlier in the session.
“This ($10) has been a long-awaited number,” Robert DiDona of Energy Ventures Analysis said.
“We’ve had strong LNG demand and we’ve had a much warmer than normal summer, which has put continued pressure on our storage estimates, which we expect to finish below the five year average, so that has subsequently been resulting in a higher forward curve,” DiDona added. Global gas prices remained elevated near $84 per mmBtu in Europe and $57 in Asia. Russia will halt natural gas supplies to Europe for three days at the end of the month via its main pipeline into the region, state energy giant Gazprom said on Friday, piling pressure on the region as it seeks to refuel ahead of winter.
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