US Natural Gas Rises on Lower Output, Higher LNG Flows

US natural gas futures rose on Tuesday, driven by a combination of lower domestic production and increased flows to liquefied natural gas (LNG) export terminals along the Gulf Coast. The front-month contract on the New York Mercantile Exchange (NYMEX) settled at $2.85 per million British thermal units, up 4.2% on the day, as market participants priced in a tighter supply-demand balance.

Producers reduced output over the US holiday weekend, a typical pattern that often leads to a temporary supply squeeze. At the same time, several LNG facilities that had previously lowered capacity for seasonal maintenance resumed higher operations, diverting more gas away from the domestic market. This dual effect tightened available supply, pushing prices higher. The US Energy Information Administration (EIA) reported that dry natural gas production averaged 102.5 billion cubic feet per day (bcf/d) in the week ending November 15, down from 103.2 bcf/d the prior week, while LNG feedgas flows rose to 13.8 bcf/d, up from 12.5 bcf/d. The spread between the front-month and next-month futures contracts widened into backwardation, indicating near-term supply concerns.

For energy traders, the move highlights the growing sensitivity of US gas prices to LNG export dynamics. When Gulf Coast terminals ramp up, domestic inventories can draw down faster, especially during periods of lower production. The Henry Hub benchmark is increasingly influenced by global gas prices, as US LNG exports compete with Asian and European demand. The Brent-WTI spread, while not directly correlated, reflects broader energy market tightness, and the US Strategic Petroleum Reserve (SPR) remains at historically low levels, adding to supply uncertainty. Traders can track real-time shifts in supply and demand using NowPrice's live fuel quotes, which provide granular data on pipeline flows, storage injections, and LNG vessel movements.

Looking ahead, the market will focus on weekly storage data from the EIA due later this week, which will confirm the extent of the supply draw. Analysts expect a withdrawal of 10-15 bcf from storage, compared to the five-year average of a 5 bcf injection. Additionally, any further maintenance schedules at LNG plants or changes in production levels could sustain upward price pressure. The crack spread for gas-to-power generation remains favorable, supporting demand from the electric sector. Traders will also monitor weather forecasts for winter heating demand, as well as any shifts in OPEC+ spare capacity that could impact global energy flows. If production remains constrained and LNG exports stay elevated, natural gas prices could test the $3.00 level in the coming weeks.