Why are US natural gas prices rising today?

US natural gas prices are rising today as the futures climbed 2.0% on Wednesday to an 11-week high. This comes as forecasts for cooler weather looks to boost heating demand, along with a drop in daily output and an increase in flows to liquefied natural gas export plants this month.

US natural gas futures

Front-month gas futures for October delivery on the New York Mercantile Exchange rose 7.6 cents, or 2.6%, to $3.041 per million British thermal units, putting the contract on track for its highest close since July 8.


It was also for the first time that the front-month was able to close above the $3 per mmBtu level of psychological technical resistance since early July. Financial firm LSEG said average gas output in the US Lower 48 states rose to 112.9 billion cubic feet per day (bcfd) in September. It is up from a monthly record high of 112.2 bcfd in August.

On a daily basis, the output was on track to drop to an 11-week low of 109.8 bcfd on Wednesday. Record output and mild spring weather have allowed energy firms to keep the amount of gas in inventory above the five-year (2021-2025) average since March.

About 40% of US power generation comes from gas-fired plants. Analysts predicted the amount of gas in storage dropped to 2.9% above normal during the week ended September 18, down from 3.7% above normal in the previous week, as per estimates. Looking forward, however, meteorologists forecast the weather would remain mostly near normal through October 8.