US natural gas futures rose by more than 7% to a new seven-year high on Thursday amid concerns that Europe would not have sufficient gas inventories for the winter heating season. Front-month gas futures for November delivery increased 39.0 cents (7.1%) to $5.867 per MMBtu, their highest settlement since February 2014. Earlier this week, gas prices were up 11% on Monday and retreated 6% on Wednesday on expectations of milder winter in the US.
Data from the US Energy Information Administration showed utilities added 88 Bcf of gas into storage in the week ended September 24, just above analysts’ estimate for an 87-Bcf build and compared to an increase of 74 Bcf in the same week in 2020 and the 2016-2020 average rise of 72 Bcf. US natural gas inventories totaled 3.170 Tcf last week, or 6.3% lower than the five-year average of 3.383 Tcf.
Gas prices were near record highs of around $30 per MMBtu in Asia and $32 in Europe. This is expected to support buying appetite for US LNG. However, the US can only convert 10.5 Bcfd of its gas output into LNG. An industry survey showed feedgas flows to major US LNG plants slipped from 10.5 Bcfd in August to 10.4 Bcfd in September.
