FX.co ★ US Natgas Prices Soar by 7%

U.S. natural gas futures experienced a notable spike, climbing 7% to reach $3.69 per MMBtu. This increase was driven by several factors, including heightened demand, decreased production, and an overarching rally within the energy market. Predictions of temperatures exceeding seasonal norms have led to an anticipated rise in air conditioning usage. Concurrently, gas production witnessed a decline, falling to 105.0 billion cubic feet per day in May, a reduction from April's peak of 105.8 billion cubic feet per day. This drop is primarily attributed to seasonal maintenance activities, notably those affecting Kinder Morgan’s Permian Highway pipeline. The market's upswing was further reinforced by a 3% hike in oil prices following OPEC+'s decision to maintain its planned output increase for July. However, feedgas allocations to U.S. LNG export terminals decreased to 15.1 billion cubic feet per day, down from April's high of 16.0 billion cubic feet per day. This reduction was the result of maintenance and temporary outages at key facilities, including Cameron, Corpus Christi, Sabine Pass, and Freeport LNG.