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U.S. natgas futures edge up on cold forecasts, rising LNG exports

U.S. natural gas futures edged up on Friday on forecasts for the weather to turn colder and heating demand to rise in late October and a continued rise in LNG exports. That price increase came despite a rise in output with Gulf Coast wells returning after Hurricane Delta.

Front-month gas futures rose 5.3 cents, or 1.9%, to $2.828 per million British thermal units at 8:44 a.m. EDT (1244 GMT). That puts the contract on track to rise for a fourth week in a row after gaining about 3% this week.

Data provider Refinitiv said output in the Lower 48 U.S. states jumped to 87.4 billion cubic feet per day (bcfd) on Thursday from a 26-month low of 82.4 bcfd over the weekend as wells shut for Delta returned to service.

As LNG exports rise and the weather turns colder, Refinitiv projected average demand would jump from 85.1 bcfd this week to 90.3 bcfd next week and 98.0 bcfd in two weeks. The amount of gas flowing to LNG export plants has averaged 6.8 bcfd so far in October, up from 5.7 bcfd in September, despite hurricane and maintenance outages this month.

That would be the most in a month since April and puts exports on track to rise for a third month in a row for the first time since February when feedgas hit a record 8.7 bcfd as rising global gas prices prompted buyers to reverse cargo cancellations.

Previously, U.S. exports fell from March-July as coronavirus-related demand destruction caused prices in Europe and Asia to collapse to record lows and buyers to cancel around 175 U.S. cargoes.

Front-month gas prices in Europe and Asia were trading at their highest since

December 2019 and January 2020, respectively, putting them both more than $2 per mmBtu over the U.S. Henry Hub benchmark.

(Reporting by Scott DiSavino; Editing by Steve Orlofsky)



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