U.S. natural gas futures jumped about 7% to a one-year high on a surprise weekly withdrawal from storage, forecasts for colder weather and rising gas flows to liquefied natural gas export plants.

The U.S. Energy Information Administration (EIA) said utilities pulled 3 Bcf of gas from storage during the week ended Nov. 15.

That compares with the 6 Bcf build analysts forecast in a Reuters poll, the 12 Bcf increase seen during the same week last year and a five-year average draw of 16 Bcf for this time of year. 

Front-month gas futures for December delivery on the New York Mercantile Exchange rose 23.5 cents, or 7.4%, to $3.428 per million British thermal units (MMBtu) at 10:42 a.m. EST (1542 GMT), putting the contract on track for its highest close since November 2023.

That kept the front-month in technically overbought territory for a second day in a row and put it on track to rise for a fifth straight day. During those five days, the contract has gained about 23%.

Supply and demand

Financial firm LSEG said average gas output in the Lower 48 U.S. states eased to 100.8 Bcf/d so far in November, down from 101.3 Bcf/d in October. That compares with a record 105.3 Bcf/d in December 2023.

That kept output on track to decline in 2024 for the first time since the COVID-19 pandemic cut demand in 2020.

Many producers reduced drilling activities this year after average spot monthly prices at the U.S. Henry Hub benchmark in Louisiana fell to a 32-year low for the month of March, and have remained soft since then.

Meteorologists projected weather in the Lower 48 states will remain mostly near normal through Nov. 27 before turning colder than normal from Nov. 28 to Dec. 6.

With colder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 107.8 Bcf/d this week to 115.7 Bcf/d next week. Those forecasts were lower than LSEG's outlook on Wednesday.

The amount of gas flowing to the seven big operating U.S. LNG export plants rose to an average of 13.5 Bcf/d so far in November, up from 13.1 Bcf/d in October. That compares with a monthly record high of 14.7 Bcf/d in December 2023.

On a daily basis, LSEG said feedgas was on track to jump to an 11-month high of 14.5 Bcf/d on Nov. 21, up from 14.1 Bcf/d on Nov. 20, as flows to a couple of plants rose to record highs.

Cameron LNG's 2.0-Bcf/d plant in Louisiana was on track to pull in a record 2.4 Bcf/d on Nov. 21, while flows to the first 1.8-Bcf/d phase of Venture Global's Plaquemines facility, which is under construction in Louisiana, was on track to rise to a record 60 MMcf/d on Nov. 21. 

The U.S. became the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar, as much higher global prices feed demand for more exports due in part to supply disruptions and sanctions linked to Russia's invasion of Ukraine in February 2022.

Gas prices rose to 11-month highs of around $15 per MMBtu at both the Dutch Title Transfer Facility benchmark in Europe and the Japan-Korea Marker benchmark in Asia on worries about Russian supplies and the coming of colder winter weather. 

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