News wire -- U.S. natural gas futures jumped to
a two-month high on Monday on forecasts calling for
warmer weather and higher air conditioning demand over
the next two weeks than previously expected.
That price move comes despite rising output, coronavirus
demand destruction, swelling stockpiles and a collapse
in liquefied natural gas (LNG) exports to their lowest
Front-month gas futures rose 7.6 cents, or 4.4%,
to $1.810 per million British thermal units at 9:32 a.m. EDT (1332 GMT). That is the highest
since May 7 and is up around 30% from a near 25-year low of $1.432 hit about a week ago.
Looking ahead, futures for the balance of 2020 and calendar 2021 were trading about 22%
and 43% over the front-month, respectively, on hopes the economy and energy demand
will rebound as state governments lift coronavirus-linked lockdowns.
Refinitiv said production in the Lower 48 U.S. states averaged 88.7 billion cubic feet
per day (bcfd) so far in July, up from a 20-month low of 87.0 bcfd in June and an all-time
monthly high of 95.4 bcfd in November.
As the weather heats up, Refinitiv forecasts U.S. demand, including exports, would rise from
89.0 bcfd this week to 92.6 bcfd next week. That is higher than Refinitiv's forecasts
on Thursday before the long U.S. July Fourth holiday weekend.
Pipeline gas flowing to U.S. LNG export plants averaged just 3.2 bcfd (33% utilization)
so far in July, down from a 20-month low of 4.1 bcfd in June and a record high of 8.7 bcfd
in February. Utilization was about 90% in 2019.
U.S. natgas output, demand to fall in 2020, 2021 due to coronavirus
U.S. pipeline exports, meanwhile, were mixed.
Refinitiv said pipeline exports to Canada averaged 2.4 bcfd so far in July, up from 2.3 bcfd
in June but still well below the all-time monthly high of 3.5 bcfd in December.
Pipeline exports to Mexico, however, averaged 5.2 bcfd so far this month, down from
5.4 bcfd in June.