US natural gas futures held steady as bullish forecasts for more demand next week and an increase in daily flows to liquefied natural gas export plants offset a bearish increase in output and ample amounts of gas in storage.
Front-month gas futures for October delivery on the New York Mercantile Exchange rose 1.1 cents, or 0.4%, to settle at $2.912 per million British thermal units.
That put the contract up about 3% for the week after falling about 5% last week.
Looking ahead, futures for calendar 2027 fell to an average of $3.31 per mmBtu, their lowest since February 2022.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the US Lower 48 states rose to 113.2 billion cubic feet per day so far in September, up from a monthly record high of 112.2 bcfd in August.
Record output and mild spring weather have allowed energy firms to keep the amount of gas in inventory above the five-year (2021-2025) average since March, reaching a high of 7.7% above normal in April.
But hotter-than-normal weather this summer has forced energy firms to pull lots of fuel from storage to produce the power needed to keep air conditioners humming, cutting the inventory surplus. About 40% of US power generation comes from gas-fired plants.
With the weather still hot this week, analysts predicted the amount of gas in storage slid to 3% above normal during the week ended September 18, down from 3.7% above normal in the previous week, according to estimates ahead of next Thursday’s weekly federal inventory report.
Meteorologists forecast weather would remain mostly warmer than normal through October 3.
LSEG said average gas demand in the Lower 48 states, including exports, is expected to slide from 109.8 bcfd this week to 108.1 bcfd next week and 105.4 bcfd in two weeks. The forecast for next week was higher than LSEG’s outlook on Thursday.
LNG EXPORTS
Average gas flows to the nine big US LNG export plants rose to 18.1 bcfd so far in September, up from 17.2 bcfd in August, but remained short of the monthly record high of 18.8 bcfd in April.
On a daily basis, LNG feedgas was on track to rise to 18.2 bcfd on Friday, up from a three-week low of 17.1 bcfd on Thursday, due primarily to an expected increase in flows to Sempra’s 2.0-bcfd Cameron LNG plant in Louisiana, according to LSEG data.
That increase in LNG feedgas, however, may not last long since US energy firm Berkshire Hathaway Energy has said it planned to start a few weeks of maintenance on its 0.8-bcfd Cove Point LNG export plant in Maryland as soon as this weekend.
Around the world, gas traded near 44-month highs of around $27 per mmBtu at both the Dutch Title Transfer Facility benchmark in Europe and the Japan-Korea Marker benchmark in Asia.
(Reporting by Scott DiSavino; Editing by Hugh Lawson, Rod Nickel)