U.S. natgas rises over 9% on higher LNG exports, another hurricane

U.S. natural gas futures jumped over 9% on Monday as LNG exports rise and on
worries production will be shut in again later this week with another hurricane
heading into the Gulf of Mexico. Tropical Storm Delta is expected to strengthen
into a hurricane before slamming into the Gulf Coast between Louisiana
and Florida on Friday. Front-month gas futures rose 22.3 cents, or 9.2%, to
$2.661 per million British thermal units at 9:37 a.m. EDT (1337 GMT).

Despite the rise in the futures, spot gas prices for Monday fell to their lowest in
years in several regions of the United States and Canada as mild weather and
coronavirus demand destruction cut usage of the fuel for heating and
industrial purposes.

Gas speculators, meanwhile, boosted their net long positions on the New York
Mercantile and Intercontinental Exchanges last week for a second week in three
on expectations energy demand will rise as the economy rebounds once state
governments lift more coronavirus-linked lockdowns. Data provider Refinitiv said
output in the Lower 48 U.S. states averaged 86.8 billion cubic feet per day (bcfd)
so far in October, down from a four-month low of 87.2 bcfd in September.

 Those production declines come as low prices earlier in the year due to coronavirus demand destruction caused energy firms to shut wells and cut back on new drilling
so much that output from new wells no longer offsets existing well declines. With milder weather coming, Refinitiv projected demand, including exports, would slip from 86.8 bcfd this week to 86.4 bcfd next week. That, however, was higher than Refinitiv's forecasts on Friday. The amount of gas flowing to LNG export plants averaged 7.1 bcfd so far in October, up from 5.7 bcfd in September as vessels started to return to Cameron in Louisiana.

(Reporting by Scott DiSavino; Editing by Andrea Ricci)

 

 

• Most Read
• Most Commented