FX.co ★ US Natgas Prices Rebound, Still Dow for the Second Week

U.S. natural gas futures increased by 2% to $2.99/MMBtu on Friday, despite being poised for a second consecutive weekly decline and hovering near a three-week low of $2.927 observed in the previous session. This price pressure is attributed to forecasts of mild weather and sufficient storage levels, even as there is a decline in production and near-record levels of LNG exports. According to LSEG data, average gas production in the Lower 48 states decreased to 106.6 billion cubic feet per day (bcfd) in October, down from 107.4 bcfd in September and a record 108 bcfd in August. The earlier high levels of output have allowed companies to build up inventories, resulting in storage levels that are approximately 4% higher than the five-year average. Forecasts predict warmer-than-normal weather extending into early November, which is likely to reduce heating demands more than it will increase cooling needs, thereby maintaining low overall gas usage. Meanwhile, gas flows to the eight major U.S. LNG export terminals reached 16.4 bcfd, up from 15.7 bcfd in September and approaching record highs, underscoring strong global demand despite a decrease in domestic consumption.