FX.co ★ Natural Gas Extends Rally to 3-Year High

In early December, for the first time in three years, U.S. natural gas futures surpassed the $5 per MMBtu threshold, marking a 65% increase since mid-October. This surge is largely attributed to heightened export demand. European countries have reaffirmed their commitment to sever reliance on Russian natural gas, confirming plans to cease importing Russian LNG entirely by the end of 2027. Concurrently, U.S. LNG exports experienced a 40% year-over-year increase in November, reaching 10.7 million tonnes, despite ongoing production hikes by producers. Additionally, demand has been bolstered by predictions of a cold front accompanying the onset of the North American winter, particularly affecting the Northeast and Great Lakes regions with lower temperatures. As a result, recent data from the U.S. Energy Information Administration (EIA) is anticipated to reveal that utilities extracted 18 billion cubic feet of natural gas in the week ending November 28th, marking a third consecutive decrease and signalling the beginning of the seasonal withdrawal period.