US natural gas futures rose in after-hours trade Monday with hotter weather and a rebound in LNG exports outweighing near-record production, as the market weighed strong short-term demand against an increasingly comfortable supply picture.
The front-month Henry Hub contract and the continuous contract both rose 1.49% to $2.93 per million British thermal units.
Forecasts indicated hotter conditions in the coming weeks, potentially boosting gas demand from power plants as consumers increase air-conditioning use, according to a Bloomberg report, citing Natgasweather.com.
Cooling demand is expected to ease through mid-September as temperatures return toward seasonal norms, Gelber & Associates said.
Forward prices also moved higher across the curve, with calendar strips for 2027 and beyond gaining between $0.01/MMBtu and $0.02/MMBtu, NRG Energy said.
Gains were likely limited by robust production over the weekend, with output reaching near-record levels for the year, according to Bloomberg.
Lower-48 dry gas production stood at roughly 114.6 billion cubic feet per day on Monday, up 5.9% from a year earlier, while total Lower-48 gas demand was about 78.4 Bcf/day, up 17.8% over the year, Bloomberg said.
Canadian imports of roughly 5.8 Bcf/d are also adding to an already ample supply picture, Gelber & Associates said.
Separately, US natural gas production rose to 109.8Bcf/d over the weekend, while total demand ranged between 84.5 Bcf/d and 89.5 Bcf/d, according to NRG Energy.
Power-sector gas demand increased to 51 Bcf/d from 47 Bcf/d, while LNG feedgas demand rose to 18 Bcf/d from 16.5 Bcf/d, NRG Energy said.
Gas flows to LNG export terminals reached about 19.6 Bcf/day Monday, up 15.8% from the prior week and the highest level since late June, as maintenance wrapped up at the Freeport LNG facility in Texas last week, Bloomberg said. The site's return from repair work has added to feedgas demand.
Additionally, LNG feedgas demand is providing a strong counterweight to slowing cooling demand, as new and recently expanded Gulf Coast facilities absorb more domestic supply, Gelber & Associates said.
The firm expects that support to remain significant as weather-driven consumption fades heading into the shoulder season.
Meanwhile, Cheniere Energy (LNG) said Monday it has substantially completed its Corpus Christi Liquefaction Stage 3 project in Texas, marking another expansion of US LNG export capacity.
Storage builds are expected to pick up once cooling demand eases more meaningfully, though sustained feedgas demand near current levels would limit the pace of that loosening, Gelber & Associates said.
Current forecasts put peak fall storage inventories near 4 trillion cubic feet, a level Gelber & Associates described as comfortable without signaling an excessive surplus.
Storage injections for the week ended Aug. 28 and the week ending Sep. 4 are both projected to be relatively light, which could weigh on end-of-season storage expectations, Pinebrook Energy Advisors said.
Pinebrook noted that with production back near record levels and weather-driven demand expected to fade in the coming weeks, the market isn't pricing in much lasting impact from the current heat.