Natural Gas Prices Surge to Highest Levels Since June

Natural Gas Prices Surge to Highest Levels Since June
Rigzone talks to several analysts about the natural gas price rise.
Image by mixmagic via iStock

Natural gas prices at Henry Hub have surged to their highest levels since June, driven by forecasts of colder than normal temperatures in the coming weeks and supported by strong LNG export flows.

That’s what Ole R. Hvalbye, a Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), told Rigzone when asked why the natural gas price is rising today.

“The latest National Oceanic and Atmospheric Administration (NOAA) short-term forecast (6-14 days) predicts colder than normal temperatures spreading from the West Coast, with below-average conditions expected across much of the country, except for the Gulf Coast and East Coast,” Hvalbye said.

“Adding to the bullish sentiment, feedgas supply to U.S. LNG export terminals has climbed to 14.07 billion cubic feet per day, the highest level since January 2024, according to BNEF,” he added.

“This marks a significant increase from last week’s average of 13.5 billion cubic feet per day. Additionally, export flows to Mexico are estimated at 6.6 billion cubic feet per day today, highlighting strong demand from the region,” he continued.

The SEB analyst said “domestic natural gas production in the U.S. is estimated at 101.8 billion cubic feet per day today, slightly below last week’s average of 102.4 billion cubic feet per day, according to Bloomberg”.

“Meanwhile, demand for nat gas across the Lower 48 states has risen to 79.3 billion cubic feet per day but remains below the five-year average of approximately 82.7 billion cubic feet per day,” Hvalbye added.

The SEB analyst also noted that the EU gas market is seeing upward price pressure and stated that, in Asia, the LNG market remains robust, with demand expected to stay high amid intensifying global competition for LNG cargoes during the winter months.

When he was asked why the natural gas price is rising today, Art Hogan, Chief Market Strategist at B. Riley Wealth, told Rigzone that “there are a couple of catalysts in today’s move in natural gas prices”.

“After three days of gains, the December gas futures contract is up another 11.4 cents to $3.112 per million British thermal units (MMBtu). That took out technical resistance at $3.10, which tends to wake up traders,” he added.

“The other catalyst sits with the freezing overnight lows in the North and the probability of more widespread wintry weather in coming weeks,” he continued.

Phil Flynn, a Senior Market Analyst at the PRICE Futures Group, told Rigzone that “we are seeing a blast of winter weather give natural gas a boost”.

Flynn warned that “conflicting headlines on how long the cold is going to last and whether or not it will impact production continue to make the rounds” and said “some of the bearish people point to the fact that supplies are ample”.

“On the flip side of that, other traders look at the long-term outlook and want to remind the marketplace that, if we do get a long … cold winter … supplies might not look as abundant as they are right now,” he continued.

To contact the author, email andreas.exarheas@rigzone.com


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Andreas Exarheas
Editor | Rigzone