US natural gas futures jumped on Friday thanks to forecasts for improving heating demand. The front-month gas futures for December delivery gained 37.9 cents (7.5%) to $5.447 per MMBtu, ending the week with their sharpest weekly increase in almost two months. Traders expect demand to be higher than previously expected as forecasts pointed to colder weather coming up. Total US gas demand, including exports, is expected to rise to 112.8 Bcfd this week from 112.0 Bcfd last week, driven by higher heating demand from residential and commercial users as the weather turns seasonally colder.
Global gas prices hovered near record highs in recent months amid robust demand for LNG cargoes to replenish extremely low inventories in Europe and meet insatiable demand in Northeast Asia. Following those global gas increases, US futures hit a 12-year high in early October but has since retreated due to high storage and production. Natural gas output in the US lower 48 states is estimated to have averaged 96.3 Bcfd so far this month, compared to 94.1 Bcfd in October and a record high of 95.4 Bcfd in November 2019.
