US natural gas futures held near a 35-month high on Monday on record flows to liquefied natural gas (LNG) export plants and forecasts for colder weather and higher demand over the next two weeks than previously expected.
Limiting gains were record output, ample amounts of gas in storage and lower gas prices around the world due mostly to the Ukraine peace talks.
Front-month gas futures for January delivery on the New York Mercantile Exchange rose 1.9 cents, or 0.4 per cent, to $4.869 per million British thermal units (mmBtu).
This put the contract on track for its highest close since December 2022 for a second day in a row and also kept the front-month in technically overbought territory for a second day in a row for the first time since mid-November.
LSEG said average gas output in the Lower 48 states rose to a record 109.6 billion cubic feet per day (bcfd) in November, up from 107.0 bcfd in October and the prior all-time monthly high of 108.0 bcfd in August.
Record output this year has allowed energy companies to stockpile more gas than usual, leaving about five per cent more gas in storage than normal for this time of year.
Meteorologists forecast temperatures across the country will remain mostly colder than normal through December 16. LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 142 bcfd this week to 139.7 bcfd next week, which was higher than LSEG’s outlook on Friday.
Average gas flows to the eight big LNG export plants operating in the US rose to a record 18.2 bcfd in November, topping the prior all-time monthly high of 16.6 bcfd in October.
In LNG news, the Imsaikah LNG vessel was anchored near Exxon Mobil/QatarEnergy’s 2.4 bcfd Golden Pass LNG export plant under construction in Texas, according to LSEG data and analyst comments.
The ship is carrying LNG from Qatar that traders and analysts say will be used to cool equipment as part of the commissioning of the plant. The facility is expected to start producing LNG later this year or early next year.
The US became the world’s biggest LNG producer in 2023, surpassing Australia and Qatar as surging global prices fed demand for more exports. This was due in part to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.
Around the world, gas prices fell to an 18-month low near $10 per mmBtu at the Dutch Title Transfer Facility (TTF) in Europe on negotiations over a potential peace plan for Russia and Ukraine. Meanwhile, prices at the Japan Korea Marker (JKM) in Asia held near a one-month low of about $11.
(Reporting by Scott DiSavino, Editing by Louise Heavens)
