U.S. Natural Gas Futures Jump 4% on Surging LNG Flows, Colder December Outlook
U.S. natural gas futures rose 4% as LNG feedgas flows hit near-record levels and forecasts show a colder-than-normal start to December.
(Reuters) — U.S. natural gas futures climbed about 4% on Nov. 19 on near-record flows to liquefied natural gas export plants and forecasts for higher demand than previously expected as the weather turns colder than normal going into December.
Front-month gas futures for December delivery on the New York Mercantile Exchange rose 17.9 cents, or 4.1%, to settle at $4.550 per million British thermal units (MMBtu).
LSEG said average gas output in the Lower 48 states rose to 109.1 billion cubic feet per day so far in November, up from 107.3 billion cubic feet per day in October and a record monthly high of 108.3 billion cubic feet per day in August.
Record output so far this year has allowed energy companies to stockpile more gas than usual. There was about 4% more gas in storage than normal for this time of year.
Meteorologists forecast temperatures across the country will remain warmer than normal through Nov. 26 before turning colder than normal from Nov. 28 to Dec. 4.
LSEG projected average gas demand in the Lower 48 states, including exports, would hold around 116.6 billion cubic feet per day this week and next. Those forecasts were higher than LSEG's outlook on Tuesday.
The average amount of gas flowing to the eight big LNG export plants operating in the U.S. rose to 18.0 billion cubic feet per day so far in November, up from a record 16.6 billion cubic feet per day in October.
In other LNG news, the Imsaikah LNG vessel continued to move across the Atlantic Ocean to Exxon Mobil and QatarEnergy's 2.4-Bcf/d Golden Pass LNG export plant under construction in Texas, according to LSEG data and analysts' comments.
The ship, expected to arrive at Golden Pass around Nov. 29, is carrying LNG from Qatar that traders and analysts say will be used to cool equipment as part of the commissioning of the plant. The facility is expected to start producing LNG later this year or early next year.
The United States became the world's biggest LNG producer in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.
Around the world, gas traded near $11 per MMBtu at the Dutch Title Transfer Facility benchmark in Europe and at a two-month high of $12 at the Japan Korea Marker benchmark in Asia.