U.S. natural gas futures held near a three-week low on Tuesday on expectations mild weather over the next two weeks will keep demand low.
Front-month gas futures NGc1 for November delivery on the New York Mercantile Exchange remained unchanged at $2.490 per million British thermal units (mmBtu) at 8:11 a.m. EDT (1211 GMT). On Monday, the contract closed at its lowest since Sept. 20.
One factor weighing on prices in recent weeks has been a reduction in the amount of gas power generators burned after Hurricanes Milton and Helene knocked out electric service to millions of homes and businesses.
There were still about 193,000 customers without power in Florida from Milton, which hit the state on Oct. 9, and 12,000 out in North Carolina from Helene, which hit Florida on Sept. 26 before moving inland.
In total, Milton caused around 3.4 million customers to lose power, while Helene caused roughly 6 million outages.
The U.S. National Hurricane Center, meanwhile, projected there was a 60% chance that a disturbance in the Atlantic Ocean would strengthen into a tropical cyclone over the next week as it moves toward Puerto Rico and the Bahamas.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 U.S. states slid to 101.4 billion cubic feet per day (bcfd) so far in October, down from 101.8 bcfd in September. That compares with a record 105.5 bcfd in December 2023.
Reductions so far this year came after many producers reduced drilling activities after average spot monthly prices at the U.S. Henry benchmark in Louisiana fell to a 32-year low in March. Prices have remained relatively low since then.
On a daily basis, output was on track to drop by 1.6 bcfd to a preliminary four-month low of 100.4 bcfd on Tuesday. Analysts, however, have said that preliminary data is often revised later in the day.
Meteorologists projected the weather in the Lower 48 states will switch from colder than normal through Oct. 17 to mostly warmer than normal from Oct. 18-30.
With warmer weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will slide from 97.3 bcfd this week to 96.0 bcfd next week. The forecast for next week was higher than LSEG’s outlook on Monday.
The amount of gas flowing to the seven big U.S. LNG export plants rose to an average of 12.8 bcfd so far in October, up from 12.7 bcfd in September. That compares with a monthly record high of 14.7 bcfd in December 2023.
On a daily basis, feedgas to the LNG plants was on track to hit a seven-month high of 13.9 bcfd on Tuesday.
The U.S. became the world’s biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices feed demand for more exports due in part to supply disruptions and sanctions linked to Russia’s invasion of Ukraine in February 2022.
Gas prices were trading around $13 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe TRNLTTFMc1 and the Japan Korea Marker (JKM) benchmark in Asia.
Source: Reuters (Reporting by Scott DiSavino; Editing by Shailesh Kuber)