US natgas prices rise to seven-week high on LNG export hopes

Average gas flows to the nine big U.S. LNG export plants held at 17.2 bcfd so far in August, the same as July. That is still well below April's monthly record high of 18.8 bcfd. On a daily basis, however, LNG feedgas rose close to a two-month high of around 18.4 bcfd. 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 43-month highs of around $24 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and $23 at the Japan-Korea Marker (JKM) JKMc1 benchmark in Asia. NG/EU Financial firm LSEG said average gas output in the U.S. Lower 48 states rose to 111.5 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 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 4.8% above normal during the week ended August 28, down from 5.5% above normal in the previous week, according to estimates ahead of the weekly federal inventory report on Thursday. EIA/GAS NGAS/POLL 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 15, 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 111.4 bcfd this week to 109.0 bcfd next week. Those forecasts were lower than LSEG's outlook on Friday. U.S. natural gas futures climbed about 2% to a seven-week high on Monday on forecasts for the weather to remain hotter than normal through mid-September and expectations that the amount of gas flowing to liquefied natural gas export plants will rise in coming weeks. Gas futures were also supported by a 3% rise in oil prices CLc1, LCOc1 after the U.S. and Iran resumed military attacks. O/R Front-month gas futures for October delivery NGc1 on the New York Mercantile Exchange (NYMEX) rose 4.7 cents, or 1.6%, to settle at $2.935 per million British thermal units (mmBtu), their highest close since July 10. For the month, the contract gained about 7% in August after dropping about 16% in July. Looking ahead, the premium of futures for November over October NGV26-X26 fell to a record low of around 13 cents per mmBtu, a sign the market is not too worried about supplies meeting demand this winter. Traders use the October-November spread to bet on winter weather forecasts and supply and demand. October is the last month of the April-October summer cooling season when demand for gas is generally low and utilities inject gas into storage. November is the first month of the November-March winter heating season when demand for the fuel is higher and utilities pull gas from storage. It would be unusual for a summer season month like October to trade over a winter month like November.

US natgas prices rise to seven-week high on LNG export hopes

LNG exports and global gas prices

Supply, storage and demand remain supportive

U.S. natural gas futures rise to seven-week high

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