NEW YORK: US natural gas futures fell about 3% to a one-week low on Monday on rising output and forecasts for the heat wave blanketing the eastern half of the country to end in a few days.
That heat boosted power prices in some regions to their highest levels since the winter as homes and businesses cranked up air conditioners.
Gas futures for July delivery on the New York Mercantile Exchange fell 12.8 cents, or 3.3%, to $3.719 per million British thermal units (mmBtu), putting the contract on track for its lowest close since June 13.
One factor that has weighed on gas prices since mid April was the growing surplus of gas in storage.
Even though the weather was hotter than normal last week, analysts projected energy firms injected more gas into storage than usual, likely boosting stockpiles to around 6% above the five-year average for this time of year.
Financial firm LSEG said average gas output in the Lower 48 US states rose to 105.5 billion cubic feet per day so far in June from 105.2 bcfd in May. That was still below the monthly record high of 106.3 bcfd in March, due primarily to normal spring maintenance earlier in the month.
Meteorologists forecast weather across the Lower 48 states will remain mostly warmer than normal through at least July 8.
With more summer heat still to come, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 103.3 bcfd this week to 105.1 bcfd next week. Those forecasts were higher than LSEG’s outlook on Friday. The average amount of gas flowing to the eight big US LNG export plants fell to 14.1 bcfd so far in June, down from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.
On a daily basis, however, feedgas was on track to rise from 14.2 bcfd on Sunday to a preliminary 15.0 bcfd on Monday on signs Cheniere Energy’s 4.5-bcfd Sabine Pass export plant in Louisiana was exiting a maintenance reduction.
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