U.S. Natural Gas Prices Rise 2% as LNG Export Volumes Climb
Output across the Lower 48 states edged lower, while ongoing pipeline maintenance kept Waha Hub prices in negative territory for a ninth straight day.
(Reuters) — U.S. natural gas futures climbed about 2% on Oct. 6 on near-record flows to liquefied natural gas (LNG) export plants and forecasts for more demand this week than previously expected.
Front-month gas futures for November delivery on the New York Mercantile Exchange (NYMEX) rose 6.7 cents, or 2.0%, to $3.391 per million British thermal units (MMBtu) at 8:42 a.m. EDT (1242 GMT).
In the cash market, average prices at the Waha Hub in West Texas, which fell to a record low of minus $7.07 per MMBtu on Oct. 2, remained in negative territory for a ninth day in a row and an 18th time so far this year due to ongoing pipeline constraints from maintenance work.
In the tropics, the U.S. National Hurricane Center projected a broad area of low pressure in the central Atlantic Ocean had a 70% chance of strengthening into a tropical cyclone over the next week as it moves northwest toward the northern Caribbean Islands.
Supply And Demand
Financial firm LSEG said average gas output in the Lower 48 states fell to 106.5 billion cubic feet per day so far in October, down from 107.1 Bcf/d 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 so far this summer. There was about 5% more gas in storage than normal for this time of year.
Meteorologists forecast the weather will remain mostly warmer than normal through at least Oct. 21.
That late-season warmth should reduce gas demand by cutting the amount of fuel used to heat homes and businesses by more than the amount of fuel power generators need to burn to keep air conditioners humming. About 40% of the power produced in the U.S. comes from burning gas.
LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 99.4 Bcf/d this week to 98.2 Bcf/d next week. The forecast for this week was higher than LSEG's outlook on Oct. 3, while the forecast for next week was lower.
The average amount of gas flowing to the eight big U.S. LNG export plants rose to 16.2 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.
That LNG export feedgas increase came as flows to Venture Global LNG's 3.2-Bcf/d Plaquemines plant in Louisiana hit a record 3.6 Bcf/d on Oct. 5. LNG plants can pull in more gas than they can turn into LNG because they use some of the fuel to power operations.
The U.S. 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.
Gas was trading around $11 per MMBtu at both the Dutch Title Transfer Facility benchmark in Europe and the Japan Korea Marker benchmark in Asia.