U.S. natural gas futures edged up around 1% on Monday as the amount of gas flowing to the country’s liquefied natural gas (LNG) export plants increases after Freeport LNG’s facility in Texas returned to near full service over the past few days.
That price increase came despite forecasts for milder weather and lower gas demand over the next two weeks than previously expected.
Front-month gas futures for October delivery on the New York Mercantile Exchange rose 1.3 cents, or 0.5%, to $2.657 per million British thermal units (mmBtu) at 7:03 a.m. EDT (1103 GMT).
With U.S. gas prices up about 1% last week, speculators boosted their net long futures and options position on the New York Mercantile and Intercontinental Exchanges for a second week in a row to their highest since late August, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report.
Financial firm LSEG said average gas output in the lower 48 U.S. states eased to 102.2 billion cubic feet per day (bcfd) so far in September, down from a record 102.3 bcfd in August.
Meteorologists forecast the weather in the lower 48 states would remain near normal until around Sept. 24 before turning mostly warmer than usual from Sept. 25-Oct. 3. Traders, however, said that above normal temperatures in late September were still mild with averages expected to be around 72 degrees Fahrenheit (22.2 Celsius) versus a normal of 70 F for that time of year.
With exports expected to increase in coming weeks, LSEG forecast U.S. gas demand, including exports, will edge up to 96.3 bcfd next week from 96.0 bcfd this week. Those forecasts were lower than LSEG’s outlook on Friday.
Gas flows to the seven big U.S. LNG export plants averaged 12.8 bcfd so far in September, up from 12.3 bcfd in August. That compares with a monthly record of 14.0 bcfd in April.
On a daily basis, LNG feedgas hit a 16-week high of 13.5 bcfd on Sunday with the increase at Freeport.
The 2.1-bcfd Freeport plant was on track to pull in about 2.0 bcfd of gas for a third day in a row on Monday, up from an average of 0.3 bcfd from Sept. 10-13, according to LSEG data.
Looking ahead, traders noted Berkshire Hathaway Energy’s 0.8-bcfd Cove Point LNG export plant in Maryland was on track to shut for about a week of planned maintenance around Sept. 21-29, according to company notices to customers. Cove Point shuts every year in the autumn for maintenance. In 2022, it shut from around Oct. 1-27, according to LSEG data.
The U.S. is on track to become the world’s biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar. Much higher global prices have fed demand for U.S. exports due to supply disruptions and sanctions linked to Russia’s war in Ukraine.
Gas was trading around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $14 at the Japan Korea Marker (JKM) in Asia.
(Reporting by Scott DiSavino; editing by David Evans)