Why was Natural Gas Price up 6% on Friday? - May 2

[dan_s]

I believe this is a bit of a preview of the Bidding War for natural gas supply likely to happen this summer.

Trading Economics:
US natural gas futures (JUN25) rose past $3.65/MMBtu in Friday afternoon trading, set for a 16% weekly gain, driven by a drop in output and record LNG exports. < JAN26 spiked to $5.18 on Friday.
> U.S. production has fallen by 2.8 bcfpd over the past five days to a two-month low of 102.6 bcfd.
> LNG exports hit a record average of 16.0 bcfd in April, driven by increased flows to the under-construction Plaquemines facility. < Total design capacity of U.S. LNG exporting facilities today is 17.8 Bcfpd and going to 22.0 Bcfpd by the end of 2026.
> Looking ahead, meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through May 17.
> Analysts suggest continued mild weather and high output could lead to record injections in May. < However, natural gas in storage when measured on Days of Demand is near the bottom of the 5-year range and gas in storage is 435 BILLION CUBIC FEET LOWER than it was at this point a year ago.
> Storage levels are now near the 5-year average. < but the 5-year average is looking backward, so it is misleading. Five years from now (2030) demand for U.S. natural gas is projected to be 20 Bcf PER DAY higher than it is in 2025.

What's changed in the U.S. natural gas market?
> LNG exporters are now in competition with utilities for natural gas supply. They have contractual export volume commitments and gas prices in Asia and Europe go way up during the winter, so they want to build up their gas in storage to take advantage of those HUGE PROFIT MARGINS.
> AI data centers are also needing to ensure that they have enough gas for power generation, so they are new bidders in the futures market.
> Lower oil prices mean less associated gas in the oil basins. Natural gas prices in the $2 to the $3 range are no longer reasonable.
> If Team Trump is successful in getting more manufacturing moved back to the U.S., that will increase demand for natural gas and power.

Bottomline: It is becoming clear that we are going to need a lot more gas in storage at the beginning of each winter to keep the natural gas supply chain running smoothly. With natural gas prices today near $11.00/MMBtu in Asia and Europe (during the lowest demand period of the year), there is BIG MONEY at stake for the LNG exporters. Natural gas prices in Asia and Europe can double or triple during a cold winter.

A big new LNG export facility on the west coast of Canada is scheduled to open for business in June 2025.

[dan_s]

The HH natural gas price is 70% higher than it was a year ago and it will be much higher in six months. Hang on to those gassers!