US natgas prices rise to two-week high on lower output, cooler outlook

By Scott DiSavino

NEW YORK, Nov 4 (Reuters) - US natural gas futures climbed about 2% to a two-week high on Wednesday on a drop in output in recent days and forecasts for seasonally cooler weather in mid-November that should boost heating demand.

Front-month gas futures for December delivery on the New York Mercantile Exchange rose 6.4 cents, or 2%, to settle at $2.959 per million British thermal units (mmBtu), their highest close since October 20.

In the spot market, however, mild weather and ample gas supplies in the US Midwest cut next-day prices in Chicago by around 10% to a 23-month low of $1.66 per mmBtu. That figure compares with an average of $3.33 so far in 2026, $3.23 in calendar 2025 and $3.60 over the past five years (2021 to 2025).

Financial firm LSEG said average gas output in the US Lower 48 states has fallen to 111.2 billion cubic feet per day (bcfd) so far in November, down from 113.4 bcfd in October and a monthly record high of 115.0 bcfd in August.

Record output and mild spring weather earlier this year allowed energy firms to keep the amount of gas in inventory above the five-year (2021-2025) average since March, with the level reaching a high of 7.7% above normal in April.

But hotter-than-normal weather over the summer forced energy firms to pull large amounts of gas from storage to fuel power plants to keep air conditioners humming, cutting the inventory surplus. About 40% of US power generation comes from gas-fired plants.

With the return of mild weather and low demand, energy firms have added more gas than usual to storage in recent weeks. The amount of gas in storage likely climbed to 1.5% above normal during the week ended October 30, up from 1.0% above normal in the previous week, according to analyst estimates ahead of Thursday's weekly federal inventory report. EIA/GAS NGAS/POLL

Looking ahead, meteorologists predicted weather across the country would remain warmer than normal through November 19, which should keep heating demand lower than usual in coming weeks.

Still, with seasonally colder weather coming, LSEG said average gas demand in the Lower 48 states, including exports, would rise from 108.0 bcfd this week to 116.4 bcfd next week. The forecast for next week was higher than LSEG's outlook on Tuesday.

LNG EXPORTS

Average gas flows to the nine major US LNG export plants have slid to 18.1 bcfd so far in November, down from 18.4 bcfd in October and a monthly record high of 18.8 bcfd in April.

Demand for US gas is high around the world due to supply disruptions linked to Russia's invasion of Ukraine in 2022 and the US-Israeli war with Iran this year.

Gas was trading around $29 per mmBtu at the Dutch Title Transfer Facility benchmark in Europe and $32 at the Japan-Korea Marker benchmark in Asia. NG/EU

US gas prices, however, have not reacted much to the conflicts in Ukraine and Iran because the US produces all the gas it consumes domestically and US LNG companies are already liquefying as much fuel as they can.

As a result, no matter how high global gas prices go, the US cannot send more LNG to the rest of the world until new liquefaction units under construction in the US enter service in coming months and years.