NEW YORK: US natural gas futures jumped about 6% on Wednesday on forecasts for cooler weather and higher heating demand over the next two weeks than previously expected and as output remains slow to return after wells and other equipment froze in last week’s Arctic freeze.
That price increase came despite forecasts for the weather to remain warmer than normal through at least early February, which should over time cut gas demand and boost output.
Last week, extreme cold boosted gas demand to a daily record high and cut both gas output and liquefied natural gas (LNG) feedgas to a one-year low.
Front-month gas futures for February delivery on the New York Mercantile Exchange rose 14.7 cents, or 6.0%, to $2.597 per million British thermal units (mmBtu) at 9:29 a.m. EST (1429 GMT).
Financial company LSEG said average gas output in the Lower 48 states fell to 102.9 billion cubic feet per day (bcfd) so far in January, down from a monthly record of 108.0 bcfd in December.
On a daily basis, US gas output was on track to jump by 13.2 bcfd from Jan. 17-24 to a preliminary one-week high of 103.7 bcfd on Wednesday. That, however, is not enough to make up for the 17.2 bcfd drop in output from Jan. 8-16 to a 12-month low of 90.5 bcfd on Jan. 16, due primarily to freeze-offs and other cold weather events.
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