US natural gas futures climbed to $3.36 per MMBtu, the highest level since early February, driven by expectations of stronger demand over the next two weeks. Forecasts point to predominantly above-normal temperatures through June 13, raising the likelihood that power generators will burn more gas to satisfy increased air-conditioning demand. Prices also drew support from the latest EIA report, which showed a smaller-than-expected build in storage inventories.
On the supply side, gas output in the Lower 48 states averaged 109.4 billion cubic feet per day (bcfd) in May, down from 109.8 bcfd in April, adding further upward pressure on prices. At the same time, flows to major LNG export facilities declined to 17.1 bcfd so far in May, from a record 18.8 bcfd in April, as several plants underwent seasonal maintenance. Overall, US natural gas prices advanced 18.9% in May, rebounding from a 4.1% decline in April.
