UNG•U.S. weekly natgas storage and benchmark prices
LSEG U.S. GFS degree-day forecast for the next two weeks
LSEG U.S. weekly supply and demand forecasts
Selected next-day U.S. gas hub prices
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 112.2 bcfd this week to 114.3 bcfd next week. Those forecasts were similar to LSEG's outlook on Tuesday.
Average gas flows to the nine big U.S. LNG export plants slid to 16.8 bcfd so far in August, due in part to reductions at a couple of facilities in Texas, including Freeport LNG's 2.4-bcfd plant and the one 0.8-bcfd liquefaction train operating at Exxon Mobil/QatarEnergy's Golden Pass.
That puts LNG feedgas down from an average of 17.2 bcfd in July and a monthly record high of 18.8 bcfd in April.
The U.S. became the world's biggest LNG exporter in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more low-cost U.S. gas.
Global gas prices have spiked in recent years primarily due to supply disruptions linked to Russia's invasion of Ukraine in 2022 and the U.S.-Israeli war with Iran this year.
Around the world, gas was trading around $18 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $21 at the Japan-Korea Marker (JKM) benchmark in Asia.
U.S. natural gas futures held near a one-week low on Wednesday as a bearish amount of gas in storage offset a bullish drop in output and forecasts for hotter weather through late August than previously expected, which should keep air conditioning demand high.
Front-month gas futures for September delivery on the New York Mercantile Exchange rose 0.6 cent, or 0.2%, to $2.688 per million British thermal units (mmBtu). On Tuesday, the contract closed at its lowest since July 28.
Financial firm LSEG said average gas output in the U.S. Lower 48 states slid to 110.5 billion cubic feet per day (bcfd) so far in August, down from a monthly record high of 110.7 bcfd in July.
Record output and mild spring weather so far this year have allowed energy firms to keep the amount of gas in inventory higher than the five-year (2021-2025) average since March.
Now, as they wait for Thursday's weekly federal inventory report, analysts projected the amount of gas in storage would rise to 6.6% above normal during the week ended July 31, up from 6.4% above normal during the previous week.
Gas inventories have remained in surplus despite weeks of above-normal temperatures so far this summer.
Meteorologists forecast the weather would remain mostly warmer than normal through August 20, forcing power generators to continue burning lots of gas to keep air conditioners humming. About 40% of U.S. power generation comes from gas-fired plants.
