U.S. natural gas futures rose on Wednesday as focus returned to forecasts for more demand for the fuel to cool homes and business amid warmer-than-normal weather.
Front-month gas futures were up 6.6 cents, or 0.7%, to $9.259 per million British thermal units (mmBtu) by 10:11 a.m. EDT (1411 GMT).
The weather factor is “tilting further to the bullish side with above normal trends becoming broader based across most of the U.S.,” Ritterbusch and Associates said in a note. Prices stabilized following a volatile session on Tuesday, when they hit $10 per mmBtu for the first time since 2008 before retreating on news of a delay in Freeport LNG’s fire-hit Texas plant’s return to operation, which would continue to hit demand by hurting the country’s capacity to send the fuel abroad.
“Although such a delay may not appear to disrupt the fall balances appreciably, it does require a significant adjustment in expected storage levels heading into the next heating cycle” with the supply shortfall likely to be reduced to around 250 billion cubic feet (bcf) or less by late November versus north of 300 bcf previously, Ritterbusch added.
The U.S. prices also continued to take cues from elevated global gas rates, with contracts at $80 per mmBtu in Europe and $56 in Asia, a likely positive driver for relatively less expensive U.S. gas exports.
Russian state energy giant Gazprom said last week the country would halt natural gas supplies to Europe for three days at the end of the month via its main pipeline into the region.
Elsewhere, gas production in the United Kingdom rose 26% in the first half of this year compared with the same period last year, an industry body said on Wednesday, as Britain cuts Russian energy imports in response to Moscow’s invasion of Ukraine.