U.S. Natural Gas Prices Hit Six-Month High as Record LNG Export Flows Drive Demand Surge
U.S. natural gas prices climbed 4% to a six-month high as near-record LNG export flows boosted demand and Lower 48 gas output dipped. LNG feedgas reached 17.9 Bcf/d, setting a new record and underscoring strong export-driven pull on U.S. pipeline supply.
(Reuters) - U.S. natural gas futures jumped about 4% to a six-month high on Friday on near-record flows to liquefied natural gas (LNG) export plants, an output drop so far this month and forecasts for more demand over the next two weeks than previously expected.
Front-month gas futures for December delivery <NGc1> on the New York Mercantile Exchange rose 16.0 cents, or 4.0%, to $4.116 per million British thermal units (MMBtu) at 9:12 a.m. EDT, putting the contract on track for its highest close since April 3.
That price increase kept the contract in technically overbought territory for a second day in a row for the first time in four weeks.
For the week, the front-month was up about 25% after gaining 10% last week. That 25% gain would be its biggest weekly percentage gain since the contract rose by a record weekly percentage gain of around 33% in April 2024.
For the month, the contract was also up about 25% after gaining 10% last month. That 25% gain would be its biggest monthly percentage gain since March.
Those increases in U.S. gas futures, coupled with a roughly 12% drop in crude futures <CLc1> over the past three months, cut the oil-to-gas ratio, or the level where oil trades compared with gas, to 15-to-1, the lowest since December 2022. On an energy equivalent basis, oil should only trade six times over gas.
So far in 2025, crude prices have averaged about 19 times over gas. That compares with 33 times over gas in 2024 and 21 times over gas during the prior five years (2019-2023).
Supply and Demand
LSEG said average gas output in the Lower 48 states fell to 107.0 billion cubic feet per day (Bcf/d) so far in October, down from 107.5 bcfd in September and a record monthly high of 108.0 Bcf/d in August.
Record output earlier this year allowed energy companies to inject more gas into storage than usual. There is about 4% more gas in storage than normal for this time of year. [EIA/GAS][NGAS/POLL]
Meteorologists forecast temperatures across the country will remain mostly warmer than normal through November 15, which should keep heating demand lower than usual for this time of year.
LSEG projected average gas demand in the Lower 48 states, including exports, would hold around 108.9 Bcf/d this week and next before rising to 109.8 Bcf/d in two weeks. The forecasts for this week and next were higher than LSEG's outlook on Thursday.
The average amount of gas flowing to the eight big U.S. LNG export plants rose to 16.6 Bcf/d so far in October, up from 15.7 Bcf/d in September and a monthly record high of 16.0 Bcf/d in April.
On a daily basis, LNG feedgas was on track to rise to 17.9 Bcf/d on Friday, which would top the current record of 17.3 Bcf/d on October 25.