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US Natural Gas Update: Futures Climb as LNG Demand, Hedge Fund Short Covering Support Prices

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US natural gas futures rose Monday as stronger liquefied natural gas export flows and hedge fund short covering added upward pressure to prices.

The front-month Henry Hub contract and the continuous contract both rose 4.66% to $2.79 per million British thermal units.

Nymex natural gas prices ended last week modestly higher, with gains concentrated in the upcoming winter months, NRG Energy said.

US natural gas production rose to 109.1 billion cubic feet per day by the end of last week, up 1.3 Bcf/d from Thursday, while domestic and export demand declined by 1.4 Bcf/d and 1.5 Bcf/d, respectively, according to NRG Energy.

US gas prices fell to around $2.60/MMBtu by Aug. 7 after reaching about $2.80/MMBtu earlier in the week, as high production and elevated inventories weighed on prices, according to Japan Organization for Metals and Energy Security, or Jogmec, Journal.

US natural gas inventories stood at 3,117 Bcf as of July 31, up 33 Bcf from the prior week, while stocks were 0.4% below the year-earlier level and 6.7% above the five-year average, according to the Energy Information Administration data, cited by Jogmec Journal.

LNG flows to US Gulf Coast export terminals reached their highest level in over a month, as some facilities appeared to be nearing the end of seasonal maintenance, tightening supply available to the domestic market and supporting prices, according to a Bloomberg report on Monday.

Hedge funds moved to cover short positions as prices strengthened, after money managers had built their largest net-short position in US benchmark Henry Hub contracts since 2020, Bloomberg said.

Above-normal temperatures are expected across nearly the entire country from Aug. 17 through Aug. 23, while parts of the Northeast are projected to see below-normal temperatures, according to the National Weather Service.

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Commodities

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