On Tuesday, US natural gas futures jumped on the back of strong LNG exports amid higher global gas prices.
US front-month gas futures soared by 3.7% or 17.8 cents to close at USD4.967/mmBtu. The rise erased most of Monday’s 5% slump, the lowest since September 7.
Yesterday’s gas prices in the spot market of New York and New England jumped to their highest since the February freeze as temperatures in the US Northeast dropped.
Compared to the USD29/mmBtu prices in Europe and USD34/mmBtu in Asia, US prices seemed more beneficial.
Buyers ran to buy US liquefied natural gas (LNG) as overseas prices continued to trade around six times higher than US futures when utilities globally scrambled to find LNG cargoes to tackle extremely low stockpiles in Europe and meet insatiable demand in Asia.
The US has plenty of gas in storage and ample production for the winter.
So far in November, according to Refinitiv, output in US Lower 48 states averaged 96.1 bcfd, up from 94.1 bcfd in the previous month. In comparison, the previous record high was 95.4 bcfd in November 2019.
The amount of gas flowing to LNG export plants has averaged 11.2 bcfd so far in November, up from 10.5 bcfd in October. The rise was attributed to test-production of LNG at the sixth train at Cheniere Energy Inc's Sabine Pass plant in Louisiana. It was a tad smaller than the record high of 11.5 bcfd in the whole month of April.
According to some analysts, European inventories were about 17% below normal for this time of year, compared with just 2% below normal in the US.
