US natgas prices climb 5% as LNG export flows hit one-month high, hot weather forecast

Average gas flows to the nine big U.S. LNG export plants held at 17.2 bcfd so far in August, the same as in July, but below the monthly record high of 17.4 bcfd in June. On a daily basis, however, LNG feedgas was on track to rise to a one-month high of 17.9 bcfd on Monday. 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 $20 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $21 at the Japan-Korea Marker (JKM) benchmark in Asia. Financial firm LSEG said average gas output in the U.S. Lower 48 states rose to 111.2 billion cubic feet per day (bcfd) so far in August, up 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. Analysts said the amount of gas in storage would likely ease to 6.6% above normal during the week ended August 7, down from 6.7% above normal the previous week, according to estimates ahead of Thursday's weekly federal inventory report. Meteorologists forecast the weather would remain mostly warmer than normal through August 25, forcing power generators to continue burning significant volumes of gas to keep air conditioners running. About 40% of U.S. power generation comes from gas-fired plants. LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 114.8 bcfd this week to 110.0 bcfd next week. Those forecasts were similar to LSEG's outlook on Friday. With futures down about 18% over the past seven weeks, speculators last week boosted their net short futures and options positions on the NYMEX and Intercontinental Exchange to their highest levels since February 2024, when net shorts hit a record high, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report. With short futures and options on the NYMEX also at their highest since February 2024, some analysts noted that any bullish news that boosts prices -- record LNG exports, a drop in output, hot summer or cold winter forecasts -- could force some speculators to buy back or cover their short positions, causing prices to spike higher. U.S. natural gas futures climbed about 5% to a two-week high on Monday on forecasts for hot weather to continue through late August and as daily flows to liquefied natural gas export plants rose to a one-month high. Front-month gas futures for September delivery on the New York Mercantile Exchange rose 13.2 cents, or 5.0%, to settle at $2.794 per million British thermal units (mmBtu), their highest close since July 24.

US natgas prices climb 5% as LNG export flows hit one-month high, hot weather forecast

LNG feedgas and global gas benchmarks

Supply, demand and LNG export outlook

Short positions remain elevated after weeks of price weakness

Natural gas futures rise on hot weather and stronger LNG flows

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