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.

Source: Reuters

 U.S. Natgas Storage (Bcf)

Week ended
Aug. 7
Week ended
July 31
 Year ago
July 31
+52 +33 +51  


Source: Reuters

 SNL U.S. Natural Gas
Next-day Prices ($/MMBtu)

 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