U.S. natural gas futures jumped about 5% to a one-week high on Monday on forecasts for hotter weather over the next two weeks than previously expected and rising flows of gas to liquefied natural gas (LNG) export plants.
Front-month gas futures for August delivery on the New York Mercantile Exchange rose 15.2 cents, or 4.6%, to settle at $3.466 per million British thermal units, their highest close since July 2.
That price increase occurred despite rising output and forecasts for lower demand over the next two weeks than previously expected.
Even though gas futures have dropped about 14% over the past three weeks, speculators last week boosted their net long futures and options positions on the New York Mercantile Exchange and Intercontinental Exchange to their highest levels since early April, the U.S. Commodity Futures Trading Commission’s Commitments of Traders report showed.
The U.S. National Hurricane Center said a tropical system off the east coast of Florida has about a 30% chance of strengthening into a tropical cyclone as it moves west into the Gulf of Mexico off Louisiana, Mississippi, Alabama and Florida over the next week.
Analysts have noted that tropical storms in the Gulf can knock some production out of service, but noted that only about 2% of all U.S. gas output comes from the federal offshore Gulf of Mexico.
The analysts noted that storms were more likely to be demand-destroying events that leave homes and businesses without power and can shut LNG export plants.
Meteorologists slightly reduced their forecasts for hotter weather for this week but continued to project the Lower 48 U.S. states will remain mostly warmer than normal through at least July 29, especially in late July.
Even though the weather has remained above normal so far this summer, analysts expect energy firms to keep injecting more gas into storage than usual in coming weeks. That’s because output hit a record high in June and was on track to top that in July, while gas flows to LNG export plants have so far languished since hitting a record in April.
There is currently about 6% more gas in storage than the five-year (2020-2024) normal for this time of year, and analysts expect that surplus to grow in coming weeks. Some analysts, however, noted that an expected rise in LNG exports should start to chip away at that surplus later this year.
SUPPLY AND DEMAND
LSEG said average gas output in the Lower 48 rose to 106.8 billion cubic feet per day so far in July, up from a monthly record high of 106.4 bcfd in June.
LSEG forecast average gas demand in the Lower 48, including exports, would slide from 107.8 bcfd this week to 106.8 bcfd next week. Those forecasts were lower than LSEG’s outlook on Friday.
The average amount of gas flowing to the eight big U.S. LNG export plants rose to 15.8 bcfd so far in July as liquefaction units at some plants slowly exited maintenance reductions and unexpected outages. That was up from 14.3 bcfd in June and 15.0 bcfd in May, but remained below the monthly record high of 16.0 bcfd in April.
On a daily basis, LNG export feedgas was on track to rise to a three-month high of 16.6 bcfd on Monday with flows to U.S. energy company Venture Global LNG’s 3.2-bcfd Plaquemines plant in Louisiana up to a record 2.9 bcfd on Sunday, according to LSEG data.
Week ended Week ended Year ago Five-year
Jul 11 Jul 4 Jul 11 average
Forecast Actual Jul 11 U.S. weekly natgas storage change (bcf): +45 +53 +18 +41 U.S. total natgas in storage (bcf): 3,051 3,006 3,208 2,874 U.S. total storage versus 5-year average +6.2% +6.1%
Global Gas Benchmark Futures ($ per mmBtu) Current Day Prior Day This Month Prior Year Five-Year
Last Year Average Average
2024 (2019-2023) Henry Hub 3.49 3.31 2.21 2.41 3.52 Title Transfer Facility (TTF) 12.39 12.21 10.32 10.95 15.47 Japan Korea Marker (JKM) 13.12 13.13 12.32 11.89 15.23
LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days Two-Week Total Forecast Current Day Prior Day Prior Year 10-Year 30-Year
Norm Norm U.S. GFS HDDs 4 3 3 3 3 U.S. GFS CDDs 242 233 218 213 203 U.S. GFS TDDs 246 236 221 216 206
LSEG U.S. Weekly GFS Supply and Demand Forecasts
Prior Week Current Next Week This Week Five-Year
Week Last Year (2020-2024)
Average For
Month U.S. Supply (bcfd) U.S. Lower 48 Dry Production 106.5 105.8 105.2 103.3 97.8 U.S. Imports from Canada 8.2 7.9 7.7 N/A 7.8 U.S. LNG Imports 0.0 0.0 0.0 0.0 0.1 Total U.S. Supply 114.7 113.7 112.9 N/A 105.7
U.S. Demand (bcfd) U.S. Exports to Canada 2.0 2.0 2.0 N/A 2.3 U.S. Exports to Mexico 7.0 6.6 6.5 N/A 6.4 U.S. LNG Export Feedgas 15.2 15.6 15.5 11.1 10.0 U.S. Commercial 4.3 4.4 4.4 4.4 4.7 U.S. Residential 3.6 3.5 3.6 3.6 3.5 U.S. Power Plant 45.2 46.0 45.2 49.0 48.1 U.S. Industrial 22.2 22.2 22.2 21.8 21.7 U.S. Plant Fuel 5.3 5.2 5.2 5.3 5.4 U.S. Pipe Distribution 2.2 2.2 2.2 2.2 3.3 U.S. Vehicle Fuel 0.1 0.1 0.1 0.1 0.2 Total U.S. Consumption 82.9 83.7 82.9 86.4 86.9 Total U.S. Demand 107.1 107.8 106.8 N/A 99.2
N/A is Not Available
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam 2025 2025 2024 2023 2022 (Fiscal year ending Sep 30) Current Day Prior Day % of Normal % of Normal % of Normal
% of Normal % of Normal Actual Actual Actual
Forecast Forecast Apr-Sep 76 76 74 83 107 Jan-Jul 76 78 76 77 102 Oct-Sep 80 79 77 76 103
U.S. weekly power generation percent by fuel – EIA
Week ended Week ended 2024 2023 2022
Jul 18 Jul 11 Wind 6 7 11 10 11 Solar 7 7 5 4 3 Hydro 5 5 6 6 6 Other 1 1 1 2 2 Petroleum 0 0 0 0 0 Natural Gas 45 44 42 41 38 Coal 19 19 16 17 21 Nuclear 17 17 19 19 19
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) Hub Current Day Prior Day Henry Hub 3.22 3.11 Transco Z6 New York 2.75 2.81 PG&E Citygate 3.38 3.49 Eastern Gas (old Dominion South) 2.58 2.64 Chicago Citygate 2.98 2.88 Algonquin Citygate 3.57 3.02 SoCal Citygate 3.76 3.97 Waha Hub 1.47 1.77 AECO 0.76 0.82
ICE U.S. Power Next-Day Prices ($ per megawatt-hour) Hub Current Day Prior Day New England 76.50 56.77 PJM West 66.86 65.49 Mid C 57.15 56.35 Palo Verde 53.58 51.77 SP-15 38.49 36.95
(Reporting by Scott DiSavino; Editing by Paul Simao and Deepa Babington)