U.S. natural gas futures jumped about 4% on Friday to a six-month high, on near-record flows to liquefied natural gas (LNG) export plants, as output dropped and forecasters expected more demand over the next two weeks than they did previously.
Front-month gas futures for December delivery on the New York Mercantile Exchange rose 16.8 cents, or 4.2%, to $4.124 per million British thermal units (mmBtu), their highest close since April 3. For the first time in four weeks, the contract remained technically overbought for a second straight day.
For the week, the front-month was up about 25%, its biggest weekly percentage gain since a record of around 33% in May 2024. Last week, the contract rose 10%.
For the month, the contract was up about 25%, its biggest monthly percentage gain since February. It gained 10% last month.
Crude futures have dropped 12% over the past three months, so the oil-to-gas ratio, the level where oil trades compared with gas, narrowed to 15-to-1, its lowest since December 2022. On an energy equivalent basis, oil should only trade six times over gas. So far in 2025, crude prices have averaged about 19 times over gas, down from 33 times over gas in 2024 and 21 times over gas during the prior five years (2019-2023).
SUPPLY AND DEMAND
LSEG said average gas output in the Lower 48 states fell to 107.0 billion cubic feet per day (bcfd) so far in October, down from 107.5 bcfd in September and a record monthly high of 108.0 bcfd in August.
Record output earlier this year allowed energy companies to inject more gas into storage than usual. There is about 4% more gas in storage than normal for this time of year. Meteorologists forecast temperatures across the country will remain mostly warmer than normal through November 15, which should limit heating demand.
LSEG projected average gas demand in the Lower 48 states, including exports, would hold around 108.9 bcfd this week and next before rising to 109.8 bcfd in two weeks. The forecasts for this week and next were higher than LSEG’s outlook on Thursday. The average amount of gas flowing to the eight big U.S. LNG export plants rose to 16.6 bcfd so far in October from 15.7 bcfd in September and surpassing the monthly record high of 16.0 bcfd in April.
On a daily basis, LNG feedgas was on track to rise to 17.9 bcfd on Friday, which would top the current record of 17.3 bcfd on October 25.
(Reporting by Scott DiSavino in New York; Editing by David Holmes and David Gregorio)