US natural gas futures climbed about two per cent on Friday with flows to liquefied natural gas (LNG) export plants back near record highs on the expected return to full service of Freeport LNG’s plant in Texas and on a planned jump in demand in two weeks with the coming of some colder-than-normal weather.
Front-month gas futures for December delivery on the New York Mercantile Exchange rose 7.4 cents, or 1.7 per cent, to $4.548 per million British thermal units (mmBtu) at 8:48 EST (13:48 GMT).
For the week, however, the front-month was down about one per cent after soaring about 52 per cent over the prior four weeks. This week’s price decline came with a jump in output to record highs that has allowed energy companies to inject ample amounts of gas into storage.
There was about five per cent more gas in storage than normal for this time of year. Looking ahead, the premium of futures for January over December fell to around 16 cents per mmBtu, its lowest since September 2022.
LSEG said average gas output in the Lower 48 states rose to 109.4 billion cubic feet per day (bcfd) so far in November, up from 107.4 bcfd in October and a record monthly high of 108.3 bcfd in August. Record output so far this year has allowed energy companies to stockpile more gas than usual.
There was about five per cent more gas in storage than normal for this time of year. Meteorologists forecast temperatures across the country will remain warmer than normal through December 6 with some colder-than-normal days around November 28-29 and December 3-5.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 118.8 bcfd this week to 119.7 bcfd next week and 131.3 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 US LNG export plants operating in the US rose to 18.0 bcfd so far in November, up from a record 16.6 bcfd in October.
In LNG export news, Freeport LNG’s plant in Texas was on track to take in more gas on Friday in a sign that one of its three liquefaction trains returned to service after shutting down on Thursday.
Elsewhere, the Imsaikah LNG vessel continued to move across the Atlantic Ocean to Exxon Mobil/QatarEnergy’s 2.4-bcfd Golden Pass LNG export plant under construction in Texas, according to LSEG data and analysts’ comments.
The ship, expected to arrive at Golden Pass around November 29, 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 United States became the world’s biggest LNG producer in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports, due in part to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.
Around the world, gas traded at a 15-month low of about $10 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe, but at a three-month high near $12 at the Japan Korea Marker (JKM) benchmark in Asia.
(Reporting by Scott DiSavino in New York Editing by Nick Zieminski)
