NEW YORK: US natural gas futures rose about 2% on Friday on forecasts for more demand over the next two weeks than previously expected and record exports to Mexico.
The price jump occurred despite near record US output and continued low amounts of gas flowing to US liquefied natural gas (LNG) export plants due to maintenance.
Front-month gas futures for July delivery on the New York Mercantile Exchange (NYMEX) were up 4.5 cents, or 2.1%, to $2.203 per million British thermal units (mmBtu) at 9:01 a.m. EDT (1301 GMT). On Thursday, the contract closed at its lowest level since May 5.
That put the contract up about 1% for the week after it lost about 16% last week.
With growing interest in energy trading, open interest in NYMEX gas futures rose to 1.387 million contracts on Thursday, its highest number since September 2021.
In the spot market, meanwhile, low demand due to mild weather cut next-day gas prices for Friday at the US Henry Hub benchmark in Louisiana to $1.77 per mmBtu, their lowest price since October 2020.
Data provider Refinitiv said average gas output in the US Lower 48 states has eased to 102.4 billion cubic feet per day (bcfd) so far in June, down from a monthly record of 102.5 bcfd in May.
Meteorologists projected the weather in the Lower 48 states would remain mostly near through June 15 before turning warmer than normal from June 16-17.
Refinitiv forecast US gas demand, including exports, would rise from 91.0 bcfd this week to 93.9 bcfd next week and 95.0 bcfd in two weeks as the weather turns seasonally warmer, prompting power generators to start burning more gas to meet rising air conditioning use.
The demand forecast for next week was higher than Refinitiv’s forecast on Thursday.
US exports to Mexico have risen to 7.6 bcfd so far in June, up from 5.9 bcfd in May. That compares with a monthly record high of 6.7 bcfd in June 2021.
Gas flows to the seven big US LNG export plants rose to 13.1 bcfd have risen so far in June, up from 13.0 bcfd in May. That was still well below the monthly record of 14.0 bcfd in April due to maintenance at several facilities, including Cheniere Energy Inc’s Sabine Pass in Louisiana.
Comments
Comments are closed.