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U.S. natgas futures rise to 5-week high on record exports

U.S. natural gas futures rose to a five-week high on Friday on near-record liquefied natural gas (LNG) and pipeline exports and forecasts power generators will burn more gas next week.

That price increase came despite forecasts for milder weather through the start of May than previously expected.

Front-month gas futures NGc1 rose 2.2 cents, or 0.8%, to settle at $2.680 per million British thermal units, their highest close since March 10.

That put the front-month up over 6% this week after losing over 4% last week.

In the power market, meanwhile, traders noted real-time prices in the Electric Reliability Council of Texas (ERCOT) rose over $500 per megawatt hour for a 15-minute interval early Friday after mostly trading in the $30s on Thursday. Over the past few hours, however, prices have dropped back to the $30s and $40s.

Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 91.7 billion cubic feet per day (bcfd) so far in April, up from 91.6 bcfd in March but still well below the record monthly high of 95.4 bcfd in November 2019.

Refinitiv projected average gas demand, including exports, would rise from 92.3 bcfd this week to 96.0 bcfd next week as the weather cools before sliding to 89.3 bcfd in two weeks as the weather turns seasonally milder. The demand forecasts for this week and next were higher than Refinitiv projected on Thursday.

The amount of gas flowing to U.S. LNG export plants averaged 11.1 bcfd so far in April, which would top March’s monthly record of 10.8 bcfd.

Analysts, however, said LNG feedgas may not break March’s record in April because flows were expected to decline this month due to planned work on a couple of facilities and the pipelines serving them, including Cheniere Energy Inc’s LNG.A Corpus Christi facility in Texas and Cameron LNG’s plant in Louisiana.

U.S. pipeline exports to Mexico averaged 6.1 bcfd so far in April, up from 5.9 bcfd in March and on track to top the monthly record of 6.0 bcfd in September 2020, according to Refinitiv data.
Source: Reuters (Reporting by Scott DiSavino; editing by Jonathan Oatis)

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