US natural gas futures edged up on Friday on forecasts for warmer weather and rising cooling demand over the next two weeks, and a continued slowdown in output.
That price increase was held back by a drop in exports due to demand destruction from the coronavirus.
In Europe, gas prices are falling toward zero as stockpiles fill quickly after a warm winter and demand destruction from the pandemic. European buyers started canceling US LNG cargoes in April for delivery in June.
Analysts said they expect LNG buyers will cancel dozens of additional cargoes over the summer since US gas forwards are trading higher than European benchmarks through at least September.
Front-month gas futures for June delivery on the New York Mercantile Exchange rose 2.1 cents, or 1.2%, to settle at $1.731 per million British thermal units.
For the week, the front-month was up about 6% after falling about 10% in the prior week.
Futures for the balance of 2020 and calendar 2021 were trading about 27% and 53% over the front-month, respectively, on expectations the economy will snap back once governments lift travel restrictions.
Data provider Refinitiv said average gas output in the US Lower 48 states fell to 89.5 billion cubic feet per day (bcfd) so far in May, down from an eight-month low of 92.9 bcfd in April and an all-time monthly high of 95.4 bcfd in November.
As the weather warms with the coming of summer and consumers crank up their air conditioners, Refinitiv projected demand in the Lower 48, including exports, would rise from 79.0 bcfd this week to 79.7 bcfd next week and 81.4 bcfd in early June.
US LNG exports averaged 6.6 bcfd so far in May, down from a four-month low of 8.1 bcfd in April and a record 8.7 bcfd in February.