US natural gas posts 12% weekly gains as power demand kicks in
Quantum Commodity Intelligence – US natural gas prices consolidated solid weekly gains Friday amid increasing power generation demand, declining output and healthy LNG exports.
Benchmark Henry Hub Jun24 futures trading on NYMEX were trading up nearly 3% on the day at $2.90/mmBtu early afternoon Eastern Time, extending weekly gains to over 12%.
Apart from very brief spikes in January and May, the Jul24 contract is trading at over six-month highs.
Latest data from the Energy Information Administration and LSEG put average gas demand at 98 billion cubic feet day (Bcf/day) in early June, so far little changed from May averages, but with summer temperatures forecast to ramp up demand for air conditioning is likely to soar.
At the same time production continues to decline with the latest EIA report flagging a 0.6% (0.7 Bcf/d) decline in the latest reporting week, with shale output around 9% lower this year as major firms including EQT and Chesapeake trim production, primarily from the Haynesville and Marcellus gas basins.
The EIA also reported that natural gas deliveries to LNG terminals increased by 0.2 Bcf/d to 13.2 Bcf/d in the latest reporting week as Freeport exports moved towards full capacity after several months of shortfalls.
Twenty-six LNG vessels left the US in the same week (8 from Sabine Pass; 5 from Freeport; 4 from Corpus Christi, 3 each from Calcasieu Pass and Cameron; 2 from Cove Point and 1 from Elba Island) with a combined LNG-carrying capacity of 94 Bcf in the week 30 May to 5 Jun.
