US Gas Futures Edge Up as LNG Feedgas Hits Four-Week High
US natgas futures rose 1.7% on higher LNG feedgas flows, but the front-month contract remains on track for a seventh straight weekly decline.
U.S. natural gas futures climbed about 1.7% on Friday, buoyed by a modest uptick in flows to liquefied natural gas (LNG) export terminals. The September delivery contract on the New York Mercantile Exchange settled 4.4 cents higher at $2.684 per million British thermal units (mmBtu), recovering slightly from Thursday's close, which was the lowest since April 28.
Despite the daily gain, the front-month contract is poised to record its seventh consecutive weekly decline, a streak not seen since February 2023. Over that period, prices have shed roughly 17%. The 12-month futures strip also slipped to $3.09 per mmBtu, its lowest level since November 2024, signaling that the market sees ample supply to meet future demand.
Supply and Demand Dynamics
Financial firm LSEG reported that average gas output in the U.S. Lower 48 states held steady at 110.7 billion cubic feet per day (bcfd) so far in August, matching July's monthly record. Record production and mild spring weather have kept inventories above the five-year average since March. Analysts expect storage levels to ease to 6.6% above normal for the week ended August 7, down slightly from 6.7% the prior week.
Meteorologists forecast warmer-than-normal weather through August 22, which should keep power generators burning significant volumes of gas for air conditioning. Gas-fired plants account for about 40% of U.S. power generation. LSEG projects total Lower 48 demand, including exports, to rise from 111.0 bcfd this week to 114.6 bcfd next week before easing to 110.0 bcfd in two weeks.
LNG Export Picture
Average feedgas flows to the nine major U.S. LNG export plants slipped from 17.2 bcfd in July to 17.0 bcfd so far in August, partly due to reductions at Texas facilities including Freeport LNG and one train at Exxon Mobil/QatarEnergy's Golden Pass. However, with Golden Pass feedgas on track to hit a record 0.6 bcfd on Friday, total daily flows to export plants are expected to reach 17.7 bcfd, a four-week high.
The U.S. became the world's largest LNG exporter in 2023, surpassing Australia and Qatar, as global prices surged following supply disruptions linked to Russia's invasion of Ukraine and the U.S.-Israeli conflict with Iran. Internationally, gas traded around $19 per mmBtu at the Dutch TTF benchmark in Europe and $21 at the Japan-Korea Marker in Asia.