FX.co ★ Natural Gas Rises To 3-Year High

U.S. natural gas futures have surpassed the $5 per MMBtu mark, reaching three-year highs and experiencing a 70% surge since their mid-October lows. This increase is driven by soaring export demand. In a significant move, European nations have re-affirmed their decision to phase out Russian natural gas, committing to end imports of Russian LNG by the end of 2027. This decision aligns with recent data indicating that U.S. LNG exports increased by 40% year-over-year in November, reaching 10.7 million tonnes, despite ongoing production hikes by suppliers. Furthermore, demand has been bolstered by forecasts for a cold front ushering in the North American winter, particularly with lower temperatures anticipated in the Northeast and Great Lakes regions. The latest EIA report revealed that utilities withdrew 12 billion cubic feet of natural gas for the week ending November 28th, marking the third consecutive decrease—indicative of the onset of the seasonal withdrawal period—though this figure was slightly above the anticipated 18 bcf drop.