US natural gas futures surged on Monday on expectations of colder weather, concerns of a possible rail strike which is expected to disrupt coal deliveries, as well as clarity on the resumption of operations at Freeport LNG.
Henry Hub soared 7.5% to USD 31.69/MMBtu as stronger heating demand boosted prices. Worries of a possible rail strike which would disrupt coal deliveries and force power generators to burn more gas also lent support to prices. According to Reuters, workers at the largest US rail union voted against a tentative contract deal reached in September, raising the possibility of a year-end strike that could cause significant delays of shipments of fuel.
The jump in Henry Hub front-month futures contract was also facilitated by clarity on the restart of Freeport LNG. The firm has postponed the partial resumption of operations from November to mid-December – if regulators approve.
As a result, the JKM natural gas benchmark saw a 3.5% increase on Monday to USD 27.30/MMBtu.
Meanwhile, European natural gas futures saw declines on stronger wind generation. The UK marker slumped 6.6% day-on-day on Monday, to USD 31.69/MMBtu, while the Dutch benchmark TTF saw a more modest 2.6% decline to USD 34.83/MMBtu.
Front-month futures and indexes at last close with day-on-day changes (click to enlarge):
Time references based on London GMT. Brent, WTI, NBP, TTF and EU CO2 data from ICE. Henry Hub, JKM and API2 data from CME. Prices in USD/MMBtu based on exchange rates at last market close. All monetary values rounded to nearest whole cent/penny. Text and graphic copyright © Gas Strategies, all rights.