US natural gas futures climbed above $3/MMBtu for the first time in two weeks in after-hours trading Tuesday despite bearish fundamentals, while European gas prices fell on signs of potential progress toward de-escalating the conflict between Iran and the US.
Front-month Henry Hub futures were up 6.42% at $3.018/MMBtu. In Europe, front-month Dutch TTF futures fell 2.482% to 71.435 euros ($81.79) per megawatt-hour, while UK NBP futures declined 1.982% to 178.000 British pence ($2.38) per therm.
US natural gas futures rose on expectations of lower end-of-season storage levels after a series of below-average weekly injections, the Wall Street Journal reported, adding that NatGasWeather.com said a short-covering rally also contributed as bearish traders rushed to exit positions as prices moved against them. Trading Economics attributed some of the rise in futures to a dip in production.
On the consumption side, Gelber & Associates said US residential and commercial demand has risen 28% to 11.2 Bcf/d as a brief cool spell reached key markets, while power burn is up 6% to 41.1 Bcf/d on lingering heat in the South. The gains have tightened the near-term balance and supported October prices after Monday's decline, though forecasts show the heating boost fading as temperatures moderate into early October, it said.
European prices softened despite low inventories after US and Iranian officials held a surprise three-hour face-to-face meeting in New York on Tuesday, during the UN General Assembly. European gas storage facilities were 69.94% full, versus 81.61% a year earlier, according to Gas Infrastructure Europe, and remained below the five-year average of 85.6% for this point in the year, according to the Swiss Federal Office of Energy.