2023-10-31 11:58
1 min. read
US natural gas futures surged to a seven-month high above $4.1 per MMBtu today, driven by a combination of increased domestic heating demand adn robust liquefied natural gas (LNG) exports.
The price increase signals potential higher energy costs for consumers this winter and reflects the growing role of the US as a key energy supplier to global markets, especially Europe and Asia. This comes as Europe seeks alternatives to Russian gas and asian nations negotiate trade deals involving US energy resources. The market is closely watching weather patterns and storage levels as the winter heating season approaches.
Demand for gas is being bolstered by forecasts of colder weather across the US. Simultaneously, LNG export volumes are hitting record levels. The average daily flow of natural gas to the eight major US LNG export facilities reached 16.6 billion cubic feet in October, exceeding the 15.7 bcfd recorded the previous month.
Europe’s reduced reliance on Russian gas, coupled with dwindling gas reserves in European trading hubs, is fueling demand for US LNG. The US Presidential administration is also actively encouraging Asian countries to commit to US energy imports as part of ongoing trade negotiations.
Despite the rising prices and increased exports, US natural gas production remains strong, currently at 107 billion cubic feet per day in October. Moreover, national gas storage levels in the Lower 48 states increased by 74 billion cubic feet during the week ending October 27th, exceeding market expectations of a 71 bcf build.
