(Reuters) – U.S. natural gas futures rose to their highest level since March on Thursday, supported by stronger liquefied natural gas (LNG) exports and forecasts for colder-than-normal weather in December.
Front-month gas futures for December delivery on the New York Mercantile Exchange moved 10.8 cents higher, or 2.4%, to $4.64 per million British thermal units (mmBtu) at 11:55 a.m. EST (1655 GMT). The contract hit its highest level since March 10 earlier in the session.
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“The LNG export market is acting as a strong demand driver,” said Thomas Saal, senior vice president for energy trading at StoneX Financial.
The average amount of gas flowing to the eight big U.S. LNG export plants has risen to 17.8 bcfd in November, up from a record 16.7 bcfd in October, and those flows are on track to increase further in coming months as Venture Global’s Plaquemines plant in Louisiana and Cheniere Energy’s Corpus Christi plant in Texas continue to ramp up production, according to LSEG data.
By December, according to some projections, it is going to get colder than normal, said Phil Flynn, senior analyst for Price Futures Group.
Financial company LSEG expects average gas demand across the Lower 48 U.S. states, including exports, to rise to 119.2 bcfd this week from 108.6 bcfd the previous week.
LSEG estimated 253 heating degree days (HDDs) over the next two weeks, slightly higher than the 228 estimated on Tuesday. HDDs, which measure the number of degrees a day’s average temperature is below 65 degrees Fahrenheit (18 degrees Celsius), are used to estimate demand to heat homes and businesses.
LSEG said average gas output in the Lower 48 states has risen to 109.3 billion cubic feet per day (bcfd) so far in November, up from 107.0 bcfd in October and a record monthly high of 108.0 bcfd in August.
Record output this year has allowed energy companies to inject more gas into storage than usual. There was about 4% more gas in storage than normal for this time of year.
Meanwhile, ADNOC Gas reported an 8% rise in its third-quarter net profit to $1.34 billion on Thursday, its highest ever for the period, as strong domestic demand and improved margins offset a weaker oil price environment.
Elsewhere, Dutch and British gas prices were slightly down on Thursday, trading in a narrow range amid weak demand due to warm weather, which is expected to become colder over the coming week.
Reporting by Anushree Mukherjee in Bengaluru. Editing by Jane Merriman and Ed Osmond
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