Record flows to LNG export plants and forecasts of higher gas demand this week than previously expected, resulted in US natural gas futures rising by 1% on Monday.
Gas futures for May delivery on the New York Mercantile Exchange (NYMEX) rose 3.5 cents, or 1%, to $3.562 per MMBtu.
This small increase came despite record output over the weekend and forecasts for less demand next week than expected, newswires reported.
Gas stockpiles were currently about 4% below normal levels for this time of year, after cold weather in January and February forced energy firms to pull large amounts of gas out of storage, especially in January, which saw record amounts withdrawn.
Financial analyst LSEG said average gas output in the Lower 48 US states rose to 106.3 bill cu ft per day thus far in April, up from a monthly record of 106.2 bill cu ft in March.
Output record
On a daily basis, output hit a record 107.4 bill cu ft on Saturday and Sunday, topping the previous all-time high of 107.3 bill cu ft per day on 24th March.
Looking forward, analysts said energy firms could cut back on oil drilling in the coming weeks, due to the around 13% drop in US crude futures this month.
The crude price drop was related in part to uncertainty tied to US President Trump’s on-off trade tariffs.
Any reduction in oil drilling in the shale basins, such as the Permian in Texas and New Mexico and the Bakken in North Dakota, could boost gas prices by cutting gas output associated with the production.
Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through 29th April.
With seasonally milder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will fall from 101 bill cu ft per day this week to 97.2 bill next week.
The average amount of gas flowing to the eight large US LNG export plants climbed from a monthly record of 15.8 bill cu ft per day in March to 16.3 bill cu ft thus far in April, on rising flows to Venture Global’s 3.2 bill cu ft per day Plaquemines export plant under construction in Louisiana.
This week, gas was trading at a near six-month low of around $11 per MMBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and at an eight-month low of around $13 per MMBtu at the Asian Japan Korea Marker (JKM) benchmark.
