U.S. natural gas futures firmed and held near a one-month high on Friday, aided by a drop in output in recent weeks and forecasts for slightly more demand in the coming weeks.
Front-month gas futures for October delivery on the New York Mercantile Exchange rose 3.7 cents, or 1.2%, to $3.11 per million British thermal units at 09:29 a.m. EDT (1329 GMT), hovering near Wednesday’s peak, when the contract hit its highest level since August 7. The contract was on track for a second straight weekly gain, up 4.2% for the week so far.
Financial firm LSEG said average gas output in the Lower 48 states has fallen to 107.5 billion cubic feet per day so far in September, down from a record monthly high of 108.3 bcfd in August.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 102.3 bcfd in the current week to 103.7 bcfd next week.
“Natural gas has found new footing but any rally for the October contract will likely face stiff resistance around $3.18, while support at $3.04 should hold us away from any deep reversal,” said Gary Cunningham, director of market research at Tradition Energy.
“Some mid-month warmth in the heartlands could give us a little boost, but with population centers in the east mostly shielded from any late-season power demands for cooling we should be somewhat limited in overall gas consumption through September.”
Meteorologists forecast the weather will remain mostly near normal through September 19, consistent with previous expectations.
The U.S. Energy Information Administration (EIA) on Thursday said energy firms injected 55 billion cubic feet (bcf) of gas into storage during the week ended August 29. That was close to the 56-bcf build analysts forecast in a Reuters poll and compares with an increase of 16 bcf during the same week last year and an average build of 36 bcf over the past five years.
Elsewhere, Dutch and British gas prices were little changed on Friday morning, continuing to trade in a tight range in the face of a scarcity of news with the potential to affect the market and no changes to the wider supply and demand balance.
Source: Reuters