U.S. natgas futures ease as rising offset higher demand forecasts

U.S. natural gas futures eased on Wednesday as an increase in output in recent days offset forecasts for more demand over the next two weeks than previously expected. Front-month gas futures fell 3.7 cents, or 1.4%, to $2.524 per million British thermal units (mmBtu) at 9:25 a.m. EDT (1325 GMT). That puts the contract on track to fall about 4% in September after rising by a 10-year monthly high of 46% in August.

For the quarter, the contract was on track to rise about 44%, the most in a quarter in four years. The premium of futures for December over November <NGX20-Z20>, meanwhile, hit a record high of 59 cents per mmBtu on Wednesday.

Data provider Refinitiv said output in the Lower 48 U.S. states rose to a two-week high of 87.2 billion cubic feet per day (bcfd) on Tuesday from a four-month low of 84.4 bcfd last week. In September, however, output was on track to decline for a second month in a row to a 23-month low of 86.7 bcfd as storms in the Gulf of Mexico, pipeline maintenance and low prices earlier in the year due to coronavirus demand destruction caused energy firms to shut wells and cut back on new drilling.

With cooler weather coming, Refinitiv projected demand, including exports, would rise from 83.7 bcfd this week to 85.3 bcfd next week due to higher heating usage and liquefied natural gas (LNG) exports. That was higher than Refinitiv's forecast on Tuesday. The amount of gas flowing to LNG export plants averaged 5.7 bcfd in September. That was the most in a month since May and was up for a second straight month for the first time since hitting a record 8.7 bcfd in February as rising global gas prices prompted buyers to reverse some cargo cancellations.

(Reporting by Scott DiSavino Editing by Bernadette Baum)

• Most Read
• Most Commented