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U.S. natural gas prices rallied Monday as analysts expect severe summer heat in the western states will drive gas demand for the first half of June.
“While we are seeing a cooler forecast in the East, there is a much hotter forecast in the West which is somewhat offsetting,” BOK Financial’s Dennis Kissler writes, also noting a large wave of selling last week he says seems to be forcing traders to buy back their positions.
Kissler says an unplanned outage at Norway’s massive Nyhamna gas processing plant, which caused European natural gas prices to spike to YTD highs, also fueled the rally in U.S. natgas, as “it looks like LNG exports should ramp up to a maximum capacity” if the pipeline remains down.
Front-month Nymex natural gas (NG1:COM) for July delivery closed +6.5% to $2.756/MMBtu, its highest level since May 22.
ETFs: (NYSEARCA:UNG), (BOIL), (KOLD), (FCG), (UNL)
U.S. exports of liquefied natural gas rebounded in May as Freeport LNG, the second-largest U.S. LNG exporter, returned to full production and as more supplies flowed to Asia, Reuters reported, citing data from LSEG.
U.S. LNG exports jumped to 7.6M metric tons in May from 6.19M tons in April and just below the 7.61M tons exported in March.
Freeport LNG, which can produce 15M metric tons/year, returned to full production last month.
