U.S. natural gas futures rose to a six-week high on Monday on forecasts for more heating demand this week than previously expected and near-record liquefied natural gas (LNG) and pipeline exports, Reuters reported.
Front-month gas futures NGc1 rose 2.4 cents, or 0.9%, to $2.704 per million British thermal units at 9:07 a.m. EDT (1307 GMT), putting the contract on track for its highest since March 4.
That increase pushed the front-month into overbought territory with a Relative Strength Index (RSI) over 70 for the first time since mid-February.
With the front-month up in seven of the past eight trading sessions, speculators last week boosted their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for the first time in eight weeks.
Data provider Refinitiv said gas output in the Lower 48 U.S. states averaged 91.5 billion cubic feet per day (bcfd) so far in April, down from 91.6 bcfd in March. That compares with a record monthly high of 95.4 bcfd in November 2019.
Refinitiv projected average gas demand, including exports, would fall from 97.7 bcfd this week to 89.2 bcfd next week as the weather turns seasonally milder. The demand forecasts for this week was higher than Refinitiv projected on Friday.
The amount of gas flowing to U.S. LNG export plants averaged 11.1 bcfd so far in April, which would top the monthly record of 10.8 bcfd in March.
Buyers around the world continue to purchase near-record amounts of U.S. gas because prices in Europe and Asia remain high enough to cover the cost of buying and transporting the U.S. fuel across the ocean.
Traders, however, noted U.S. LNG exports cannot rise much more until new units enter service in late 2021, since the United States only has the capacity to export about 10.5 bcfd of gas as LNG. LNG plants pull in a little more gas than they export since they use some of the fuel to run the facility.
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.
