US natural gas futures rose about 3% to above $2.3/MMBtu on Monday, recovering from a significant 14.2% drop last week, driven by lower production and forecasts of cooler weather that could increase heating demand.
US natural gas prices rise slowly
Despite meteorologists predicting mostly warmer-than-normal temperatures through early November, the anticipated cooler conditions in the coming week are expected to boost demand for heating, leading to a projected rise in average gas demand from 96.0 billion cubic feet per day (bcfd) this week to 100.2 bcfd next week. Average gas output in the Lower 48 states has decreased to 101.5 bcfd in October, down from 101.8 bcfd in September, and analysts expect producers to cut output in 2024 for the first time since 2020 due to reduced drilling activities.
Gas flows increased
Additionally, gas flows to the seven major US LNG export plants increased to an average of 13.1 bcfd this month, up from 12.7 bcfd in September, although still below the record high of 14.7 bcfd set in December 2023.
