Traders also said prices were supported by the amount of gas exported from Canada to the U.S. remaining low due to wildfires in Alberta and other western provinces.
The amount of U.S. power generated by wind this week was on track to drop to just 7% of the total versus a recent high of 17% during the week ended April 21, according to federal energy data.
That means power generators have had to burn more gas to produce electricity, and there will be less of the fuel available to go into storage.
The amount of power generated by gas was on track to hit 43% this week, up from a recent low of just 37% during the windy week ended April 21.
Front-month gas futures for June delivery on the New York Mercantile Exchange were up 7.1 cents, or 2.7%, at $2.663 per million British thermal units (mmBtu) at 9:35 a.m. EDT (1335 GMT), putting the contract on track for its highest close since March 7.
That pushed the front-month over its 100-day moving average, which has been a key level of technical resistance, for the first time since late November.
It also kept the contract in technically overbought territory with a relative strength index (RSI) of more than 70 for a second day in a row for the first time since July 2022.
For the week, the front-month was up about 17% after rising about 6% last week. This week’s gain would be the contract’s biggest weekly percentage increase since early March, when it soared about 23%.
But all gas prices were not up. In the spot market, mild weather and ample hydropower in the U.S. West pressured next-day gas for Friday at the PG&E Citygate in Northern California to $3.62 per mmBtu, its lowest since April 2021.
Over the past couple of weeks the average amount of gas flowing from Canada to the U.S. has averaged just 7.1 billion cubic feet per day (bcfd) as wildfires in Alberta and other western provinces caused some producers to shut oil and gas output, according to data provider Refinitiv.
That is well below the 8.4-bcfd average amount of gas exported from Canada to the U.S. since the start of the year and 2022’s average of 9.0 bcfd. About 8% of the gas consumed in or exported from the U.S. comes from Canada.
On a daily basis, Canadian gas exports were on track to rise to 7.3 bcfd on Friday, up from a 25-month low of 6.4 bcfd on Wednesday.
In the U.S. meanwhile, Refinitiv said average gas output in the Lower 48 states has held at 101.4 bcfd so far in May, matching April’s monthly record.
Meteorologists projected the weather in the U.S. Lower 48 states would remain mostly near normal through June 3.
Refinitiv forecast U.S. gas demand, including exports, would slide from 93.0 bcfd this week to 89.4 bcfd next week before rising to 90.7 bcfd in two weeks. The forecasts for this week and next were similar to Refinitiv’s outlook on Thursday.
Gas flows to the seven big U.S. LNG export plants have fallen from a record 14.0 bcfd in April to an average of 12.9 bcfd so far in May due to maintenance work at several plants, including Cameron LNG in Louisiana and Cheniere Energy Inc’s Sabine Pass in Louisiana.
Last month’s record flows were higher than the 13.8 bcfd of gas the seven plants can turn into LNG since the facilities also use some of the fuel to power their equipment.
(Reporting by Scott DiSavino; Editing by Jan Harvey)