FX.co ★ US Natgas Prices Rise on Strong LNG Demand

U.S. natural gas futures surged nearly 5%, reaching $3.46 per million British thermal units on Wednesday. This uptick was buoyed by increased flows to liquefied natural gas (LNG) export facilities. So far in February, average gas flows to the top eight U.S. LNG export terminals have climbed to 18.3 billion cubic feet per day (bcfd), compared to 17.8 bcfd in January and approaching December's record high of 18.5 bcfd. In 2023, the U.S. emerged as the world's leading LNG exporter, driven by heightened global demand in the wake of supply disruptions following Russia’s invasion of Ukraine in 2022. Forecasts indicate that temperatures will generally remain above average through February 19, with the exception of the Northeast, which is expected to continue experiencing below-average temperatures for another week. In terms of production, the average gas output in the Lower 48 states slightly increased to 106.4 bcfd in February from 106.3 bcfd in January. Analysts predict that significant withdrawals during last week's Arctic conditions have caused storage levels to drop from about 5% above the norm to approximately 1% below, perpetuating short-term supply concerns.