US natgas prices climb to 7-week high on rising demand forecasts

Average gas flows to the nine big U.S. LNG export plants rose to 18.0 bcfd so far in September from 17.2 bcfd in August. That is still short of the monthly record high of 18.8 bcfd in April. On a daily basis, LNG feedgas slid from 18.3 bcfd on Tuesday to a one-week low of 17.6 bcfd on Wednesday, likely due to reductions at several plants in Texas and Louisiana as Tropical Storm Edouard crossed over the region. 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. Around the world, gas was trading near 44-month highs of around $25 per mmBtu at the Dutch Title Transfer Facility benchmark in Europe and $24 at the Japan-Korea Marker in Asia. Financial firm LSEG said average gas output in the U.S. Lower 48 states rose to 112.2 billion cubic feet per day (bcfd) so far in September, up from a monthly high of 111.5 bcfd in August. Record output and mild spring weather this year allowed energy firms to keep the amount of gas in inventory higher than the five-year (2021-2025) average since March. But with hot weather last week, analysts said the amount of gas in storage likely eased to 5.3% above normal during the week ended August 28 from 5.5% above normal the previous week, according to estimates ahead of the weekly federal inventory report on Thursday. Gas inventories have remained in surplus despite weeks of above-normal temperatures this summer. Meteorologists forecast the weather will remain mostly warmer than normal through September 17, pushing power generators to continue burning more gas than usual 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 112.5 bcfd this week to 109.4 bcfd next week. Those forecasts were higher than LSEG's outlook on Tuesday. Limiting gains was a slight reduction in gas flows to some LNG plants along the Gulf Coast, including Cheniere Energy's Sabine Pass in Louisiana, after Tropical Storm Edouard crossed over the area on Tuesday. Edouard is now a tropical depression dropping lots of rain north of Houston. Tropical storms can reduce gas demand by cooling the weather and cutting air conditioning use, knocking out power to homes and businesses and disrupting operations at LNG export plants and other industrial facilities. There are currently about 68,300 homes and businesses without power in Texas, according to power outage tracking firm PowerOutage.us. U.S. natural gas futures climbed about 2% on Wednesday to a seven-week high as demand forecasts were lifted, with unseasonably warm temperatures expected through at least mid-September. Front-month gas futures for October delivery on the New York Mercantile Exchange rose 5.2 cents, or 1.8%, to settle at $2.956 per million British thermal units (mmBtu), the highest close since July 9.

US natgas prices climb to 7-week high on rising demand forecasts

LNG exports and global gas prices

Supply, storage and demand forecasts

Weather and outages affect demand and LNG flows

Natural gas futures rise on hotter weather forecasts

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