Heatwave sweeps across the U.S., natural gas surges to a 16-week high
- US natural gas futures rose by about 3.0% on Thursday, reaching a 16-week high. The July delivery contract settled at $3.311 per million British thermal units, marking the highest closing price since February 6. This was mainly due to weather forecasts indicating hotter conditions next week and higher-than-expected demand.
- Data shows that since June, the average daily natural gas output in the US Lower 48 states fell to 10.85 billion cubic feet, down from May’s 10.97 billion cubic feet. Over the past six days, daily output plummeted by 310 million cubic feet to 10.74 billion cubic feet on Thursday, the lowest in four months, mainly due to declines in production in Texas and Arkansas.
- Weather forecasts indicate that temperatures are expected to remain mostly above normal until June 19. During that period, the amount of gas burned in power plants for air conditioning will increase. The average natural gas demand in the Lower 48 states, including exports, is expected to rise from 9.84 billion cubic feet this week to 10.05 billion cubic feet next week.
- Due to spring maintenance at several LNG export plants, including Golden Pass and Freeport, the average feed gas intake at US LNG export facilities has dropped from 17.1 billion cubic feet in May to 16.3 billion cubic feet since June, far below the record monthly high of 18.8 billion cubic feet set in April.
- The market is awaiting the weekly inventory report from the US Energy Information Administration to be released on Thursday. It is expected that natural gas inventories increased by 101 billion cubic feet during the week of May 29, which is in line with the five-year average. In the same period last year, the increase was 119 billion cubic feet. Current total inventories stand at 2.584 trillion cubic feet, 5.9% above the five-year average.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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