FX.co ★ US Natgas Prices Rise on Strong LNG Demand

US natural gas prices climbed more than 4% to $2.785 per MMBtu on Monday, driven by stronger demand from liquefied natural gas (LNG) export facilities. Daily flows to the nine major US LNG export plants were on pace to hit a one-month high of 17.9 bcfd. Average feedgas demand in July stood at 17.2 bcfd, only slightly below June’s record monthly level of 17.4 bcfd.

On the supply side, natural gas output in the Lower 48 states averaged a record 111.2 bcfd in August, up from 110.7 bcfd in July. Robust production and relatively mild weather earlier this year have kept inventories above the five-year average since March. Analysts expect the storage surplus to narrow modestly to 6.6% above normal for the week ending August 7.

Looking ahead, forecasts indicate that temperatures will remain above normal through August 25. This prolonged heat is likely to support continued strong gas demand from power generators as air-conditioning use stays elevated.