- U.S. natural gas futures surged 11% to $3.34/mmBtu as colder weather forecasts, high LNG export flows, weaker Lower 48 production, and robust heating demand projections combined with aggressive short covering, while ample gas storage at 4% above the five-year average helped offset supply concerns
- U.S. natural gas futures surged 11% to $3.34/mmBtu as colder weather forecasts, high LNG export flows, weaker Lower 48 production, and robust heating demand projections combined with aggressive short covering, while ample gas storage at 4% above the five-year average helped offset supply concerns
U.S. natural gas futures (NATGAS) jumped 11% on Monday, with the November contract surging to $3.34/mmBtu—its highest in nearly two weeks and the largest daily rise since late September. This move was spurred by colder weather forecasts, which drove heating demand sharply higher, causing LSEG's two-week heating degree day outlook to increase from 118 to 164. Analysts also pointed to aggressive short covering after a period when speculative positions had built up, amplifying the rally as traders rushed to exit bearish bets.
Further fueling the gains, LNG export flows hit near-record levels at 16.4 bcfd for October, up from 15.7 bcfd last month, signaling sustained international demand. Meanwhile, Lower 48 production edged down to 106.6 bcfd, and although U.S. storage stands around 4% above the five-year average, persistent output softness alongside strong exports make the market sensitive to supply shifts. Benchmark prices have rebounded over 15% in the last month, with the upward momentum reflecting both tightening balances and bullish weather risk.
NATGAS broke through the 200-day exponential moving average (golden curve on the chart below), which historically has been an important point in the overall long-term trend. Breaking through this level theoretically reverses the previous downward trend in the asset to an upward one. However, it is worth remembering that overall gas reserves in the US remain above the historical average.
Source: xStation
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