NEW YORK: US natural gas futures eased to a 14-week low on Thursday ahead of a bearish federal report expected to show energy firms last week added more gas than usual into storage for a third week in a row.
Front-month gas futures for September delivery on the New York Mercantile Exchange fell 2.6 cents, or 1percent, to USD2.662 per million British thermal units (mmBtu), putting the contract on track for its lowest close since April 29.
Analysts forecast energy firms added 31 billion cubic feet (bcf) of gas to storage during the week ended July 31.
That compares with an increase of 13 bcf during the same week last year and a five-year (2021-2025) average increase of 23 bcf for the period.
Financial firm LSEG said average gas output in the US Lower 48 states eased to 110.6 billion cubic feet per day (bcfd) so far in August, from a monthly record high of 110.7 bcfd in July.
Record output and mild spring weather so far this year allowed energy firms to keep the amount of gas in inventory higher than the five-year (2021-2025) average since March.
Now, as they waited for Thursday’s weekly federal inventory report, analysts projected the amount of gas in storage would rise to 6.6percent above normal during the week ended July 31, from 6.4percent above normal during the previous week.
Gas inventories have remained in surplus despite weeks of above-normal temperatures so far this summer.
Meteorologists forecast the weather would remain mostly warmer than normal through August 21, forcing power generators to continue burning lots of gas to keep air conditioners humming. About 40percent of US power generation comes from gas-fired plants.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 112.2 bcfd this week to 115.2 bcfd next week. The forecast for next week was higher than LSEG’s outlook on Wednesday.
Average gas flows to the nine big US LNG export plants slid to 16.9 bcfd so far in August due in part to recent reductions at Freeport LNG’s 2.4-bcfd plant in Texas and the one 0.8-bcfd liquefaction train operating at Exxon Mobil /QatarEnergy’s Golden Pass in Texas.
That puts LNG feedgas down from an average of 17.2 bcfd in July and a monthly record high of 18.8 bcfd in April.
The US became the world’s biggest LNG exporter in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more low-cost US gas.
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