U.S. natural gas futures on Aug. 7 jumped to their highest since December after rising by the most in a week since 2009, as LNG exports increased and forecasts called for hot weather through late August.
"The LNG market’s worst days appear to be behind it, with fewer cancellations in September expected to bring utilization back toward 60% before an even stronger recovery in October," said Daniel Myers, market analyst at Gelber & Associates in Houston.
Front-month gas futures rose 7.3 cents, or 3.4%, to settle at $2.238 per million British thermal units (MMBtu), their highest close since Dec. 26.
For the week, the contract was up 24%, its biggest weekly gain since September 2009.
Although U.S. and European gas contracts mostly trade on their own fundamentals, gas at the European Title Transfer Facility benchmark in the Netherlands also soared this week, jumping 50%. That made it profitable for more U.S. LNG cargoes to go to Europe again for the first time in months.
U.S. LNG exports in August were on track to rise for the first time in six months as the amount of pipeline gas flowing to the plants climbed to 4 Bcf/d in August from a 21-month low of 3.3 Bcf/d in July, when buyers canceled dozens of cargoes—the most in a month.
With hot weather expected to return after Hurricane Isaias cooled the East Coast, data provider Refinitiv projected U.S. demand, including exports, will rise from an average of 88.5 Bcf/d the week ending Aug. 7 to 90.6 Bcf/d the next week and 91.9 Bcf/d in two weeks. That is a little lower than Refinitiv's outlook on Aug. 6 as higher gas prices cause power generators to burn more coal instead of gas.
U.S. Natgas Storage (Bcf) |
|||
Week ended Aug. 7 (Forecast) |
Week ended July 31 (Actual) |
Year ago July 31 |
|
+52 | +33 | +51 |
SNL U.S. Natural Gas
|
||
Hub | Current Day | Prior Day |
Henry Hub | $2.26 | $2.23 |
Transco Z6 New York | $1.34 | $1.58 |
PG&E Citygate | $2.72 | $2.70 |
Dominion South | $1.31 | $1.42 |
Chicago Citygate | $1.94 | $1.95 |
Algonquin Citygate | $1.42 | $1.55 |
SoCal Citygate | $1.99 | $2.18 |
Waha Hub | $0.93 | $1.13 |
Recommended Reading
US Drillers Add Oil, Gas Rigs for First Time in Five Weeks
2024-04-19 - The oil and gas rig count, an early indicator of future output, rose by two to 619 in the week to April 19.
Strike Energy Updates 3D Seismic Acquisition in Perth Basin
2024-04-19 - Strike Energy completed its 3D seismic acquisition of Ocean Hill on schedule and under budget, the company said.
Santos’ Pikka Phase 1 in Alaska to Deliver First Oil by 2026
2024-04-18 - Australia's Santos expects first oil to flow from the 80,000 bbl/d Pikka Phase 1 project in Alaska by 2026, diversifying Santos' portfolio and reducing geographic concentration risk.
Iraq to Seek Bids for Oil, Gas Contracts April 27
2024-04-18 - Iraq will auction 30 new oil and gas projects in two licensing rounds distributed across the country.
Vår Energi Hits Oil with Ringhorne North
2024-04-17 - Vår Energi’s North Sea discovery de-risks drilling prospects in the area and could be tied back to Balder area infrastructure.