U.S. natgas futures jump to fresh 9-month high following contract roll

U.S. natural gas futures jumped to a fresh nine-month high as the front-month rolled to a new more expensive contract and lots of production remained shut along the Gulf Coast from Hurricane Laura.

In addition, pipeline exports to Mexico climbed to a record high for a fourth day in a row and LNG exports started to edge up after dropping to an 18-month low earlier in the week when two LNG plants in Louisiana shut for Laura. The remnants of Hurricane Laura, which smashed into the Gulf Coast as a major Category 4 storm early Thursday, are now over Arkansas.

Energy firms along the Gulf Coast are assessing damage to their oil and gas infrastructure as they slowly return their pipes and plants to service. On its first day as the front-month, gas futures for the most active October contract remained unchanged at $2.707 per million British thermal units at 8:11 a.m. EDT (1211 GMT). But since October futures are trading much higher than where the September contract closed on Thursday, the front-month was up almost 5%, putting it on track for its highest settle since Nov. 8.

For the week, the front-month was up 10%. That puts the contract up for a fourth week in a row for the first time since May 2019, gaining a total of 50% over those four weeks. On a daily basis, the amount of gas flowing to U.S. LNG export terminals was on track to rise on Friday for a second day in a row to 2.8 billion cubic feet per day (bcfd). On Wednesday, pipeline flows to the LNG plants fell to 2.3 bcfd, their lowest since February 2019, after Cheniere Energy Inc and Cameron LNG shut their Louisiana plants. U.S. output, meanwhile, was on track to drop to a three-month low of 85.3 bcfd as many wells in the Gulf remain shut for Laura, according to preliminary data from Refinitiv.

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