NEW YORK: US natural gas futures dipped on Monday due to near-record production, but forecasts for extreme heat that will boost cooling demand and a shorter US deadline for Russia to agree to a ceasefire in the war with Ukraine capped the slide.
Front-month gas futures for August delivery on the New York Mercantile Exchange were down 1.2 cents, or 0.4%, to $3.10 per million British thermal units at 9:48 a.m. EDT, after hitting its lowest price since late April at $3.047 earlier in the session. The August contract expires on Tuesday. LSEG said average gas output in the Lower 48 has risen to 107.4 billion cubic feet per day so far in July, up from a monthly record high of 106.4 bcfd in June.
“In the short term, these production numbers have been a negative factor. But I think we’re getting close to the bottom of prices as now we see the demand expectations rising,” said Phil Flynn, senior analyst for Price Futures Group
“The market is going to face some pretty substantial amounts of air conditioning demand this week. Also, Trump’s shorter deadline for Russia has raised concerns about new sanctions on Russian gas and oil.”
Meteorologists forecast temperatures in the Lower 48 US states will remain mostly hotter than normal this week. A heat dome is driving record-breaking temperatures across the Southeast, mid-South, and parts of the Midwest.
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