FX.co ★ US Natgas Prices Rise to Nearly 3-Year High

U.S. natural gas futures surged by 5% to reach $4.54 per MMBtu on Tuesday, marking the highest level since December 2022. This increase reflects traders’ expectations for a colder December and heightened power demand, notwithstanding predictions of milder temperatures in the upcoming week. Additionally, export activities are contributing to the price hike. Liquefied natural gas (LNG) flows to the eight major U.S. LNG facilities have averaged 17.8 billion cubic feet per day (bcfd) in November, surpassing the previous record of 16.7 bcfd in October, with projections indicating further increases. Strong demand from Europe, as countries aim to cut reliance on Russian gas, along with U.S. encouragement of energy imports to Asia, is also bolstering prices. Meanwhile, U.S. production remains robust, maintaining an average of 109 bcfd in November, which helps to counterbalance the escalating export figures. Earlier this year, high output enabled companies to amass larger gas reserves than usual, placing inventories approximately 4% above the seasonal norm.