US Natgas Prices Surge 6% to One-Week High Amid Rising LNG Export Flows
Key Insights
U.S. natural gas futures rose 6% to a one-week high as LNG export plants resumed operations post-maintenance, boosting demand.
August delivery futures settled at $3.739 per mmBtu, marking a 15% increase from the previous front-month contract.
Analysts project tighter supplies as power generators burn more gas amid a prolonged heatwave, reducing storage injections.
Global LNG demand remains strong, with the U.S. maintaining its position as the world's top LNG supplier.
U.S. natural gas futures surged 6% on Friday, reaching a one-week high as liquefied natural gas (LNG) export plants began ramping up operations following seasonal maintenance. The August delivery contract on the New York Mercantile Exchange (NYMEX) settled at $3.739 per million British thermal units (mmBtu), a 21.3-cent increase from Thursday's close. This marked the highest closing price since June 20 and a 15% rise from the previous front-month contract.
The uptick reflects growing demand as LNG facilities return to full capacity, coupled with heightened gas consumption by power generators during an ongoing heatwave. Analysts noted that storage injections likely fell below seasonal norms this week due to increased electricity demand for cooling. Despite the rally, the front-month contract remains 3% lower for the week, following a 7% gain the prior week.
Supply dynamics also played a role, with average gas output in the Lower 48 states rising to 105.6 billion cubic feet per day (bcfd) in June, up from May's 105.2 bcfd but still below March's record of 106.3 bcfd. Meanwhile, LNG feedgas volumes dipped to 14.2 bcfd in June from 15.0 bcfd in May, though they showed signs of recovery as maintenance concluded at some plants.
Global LNG markets remain robust, with the U.S. retaining its status as the world's leading supplier. However, European and Asian benchmarks softened, with the Dutch TTF trading at a four-week low of $11 per mmBtu and the Japan Korea Marker (JKM) at a two-week low of $13. The market now eyes weather forecasts and storage trends for further price direction.