US gas rises on news about output cuts

Tuesday was marked by gas futures’ strengthening in the USA. The reason for that is a decrease in gas production due to unfavourable weather conditions. The forecast of warming and lower demand in December is not that relevant now amid effects of winter storm.

Near-term gas futures are up 4%. Meanwhile, gas contracts lost 23% last week. Thus, analysts at Ritterbusch and Associates noted an increase in gas prices due to the suspension of supply after the storm. However, the short-term outlook for market sentiment remains bearish. Expected weather conditions have caused major fluctuations in gas prices as the market would focus more on the imminent warming rather than expecting the extreme cold.

Refinitiv reported that average U.S. gas production fell to 80.4 billion cubic feet on Saturday. Daily U.S. gas demand hit a record of 148.5 Bcf on Friday. At the same time, U.S. gas demand and exports are forecast to rise. The increase will go from 139.9 Bcf/d last week to 145.7 Bcf/d by the end of this week. Volume should then drop to 113.9 Bcf/d in early January as warming is expected.