U.S. natgas futures rise for 5th day on cooler forecasts

Traders also said mild weather last week likely caused utilities to boost injections into storage


U.S. natural gas futures rose for a fifth day in a row on Tuesday on forecasts for cooler weather and slightly higher heating demand next week than previously expected.

Traders noted that even though temperatures may be lower, they were expected to remain around near-normal levels through late April.

Traders also said mild weather last week likely caused utilities to boost injections into storage by so much that the total amount of gas in inventory likely rose above the five-year (2016-2020) average for the first time since the February freeze. 

Front-month gas futures rose 6.2 cents, or 2.4%, to $2.623 per million British thermal units at 9:58 a.m. EDT (1358 GMT), putting the contract on track for its highest close since April 1 for a fifth day in a row.

If the contract closes up on Tuesday, it would be the first time the front-month rises for a fifth straight day since January.

Data provider Refinitiv said output in the Lower 48 U.S. states averaged 91.7 billion cubic feet per day (bcfd) so far in April, up from 91.6 bcfd in March but still well below the record monthly high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would rise from 91.8 bcfd this week to 93.3 bcfd next week as the weather cools. Those demand forecasts were higher than Refinitiv projected on Monday.

The amount of gas flowing to U.S. liquefied natural gas (LNG) export plants averaged 11.0 bcfd so far in April, which would top March's monthly record of 10.8 bcfd.

Analysts, however, said they do not expect LNG feedgas to break March's record in April because flows were expected to decline later this month due to planned work on a couple of facilities and the pipelines serving them, including Cheniere Energy Inc's Corpus Christi in Texas and Cameron LNG's plant in Louisiana. 

U.S. pipeline exports to Mexico averaged 5.8 bcfd so far in April. That compares with 5.9 bcfd in March and a record 6.0 bcfd in September 2020. On a daily basis, however, Mexico exports were on track to rise to 6.7 bcfd on Tuesday, their highest since hitting a record 6.9 bcfd on April 9, preliminary data from Refinitiv shows.

(Reporting by Scott DiSavino; Editing by Barbara Lewis and Andrea Ricci) ((scott.disavino@thomsonreuters.com; +1 332 219 1922; Reuters Messaging: scott.disavino.thomsonreuters.com@reuters.net))

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