US natural gas prices climb on return of Freeport LNG, lower output
NEW YORK: US natural gas futures climbed about 4% on Wednesday on a drop in output and forecasts for demand to rise more than previously expected this week, especially with the return to service of Freeport LNG's export plant in Texas from an outage on Tuesday.
Gas futures for June delivery on the New York Mercantile Exchange rose 12.9 cents, or 3.7%, to $3.492 per million British thermal units at 9:50 am EDT (1350 GMT).
Analysts said mild weather expected to last through late May should keep heating and cooling demand low, allowing utilities to continue injecting more gas into storage than normal for this time of year.
Gas stockpiles were currently around 1% above the five-year normal.
Inventories had been below normal from mid-January through late April after utilities pulled a monthly record 1.013 billion cubic feet of gas from storage in January to keep homes and businesses warm during extreme cold weather this winter.
Some analysts said mild weather and record output this spring could allow energy firms to add record amounts of gas into storage in May. The current all-time monthly injection high of 494 bcf was set in May 2015. Financial firm LSEG said average gas output in the Lower 48 US states fell to 103.4 billion cubic feet per day so far in May, down from a monthly record of 105.8 bcfd in April.
Since gas output hit a daily record high of 107.4 bcfd on April 18, production was on track to drop by around 5.5 bcfd to a preliminary 10-week low of 102.6 bcfd on Tuesday. Analysts have noted that preliminary data is often revised later in the day.
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