NEW YORK: US natural gas futures fell about 3 percent on Monday on forecasts for less demand next week than previously expected, and a drop in spot prices in Pennsylvania to multi-year lows.
That price decline came despite a continued drop in daily output to a four-month low and a rise in daily gas flows to liquefied natural gas export plants to a five-month high.
Front-month gas futures for November delivery on the New York Mercantile Exchange (NYMEX) fell 9.4 cents, or 2.9 percent, to USD3.126 per million British thermal units (mmBtu). On Friday, the contract closed at its highest since September 24.
Even though gas futures were on track to rise for a third month in a row, speculators last week boosted their net short futures and options positions on the NYMEX and Intercontinental Exchange to their highest levels since February 2024, according to the US Commodity Futures Trading Commission’s Commitments of Traders report.
In the spot market, meanwhile, mild weather and pipeline issues trapping some gas in the US Northeast region helped pressure next-day prices at the Enbridge South hub in southwest Pennsylvania down to around 61 cents per mmBtu, their lowest since November 2020.
Financial firm LSEG said average gas output in the US Lower 48 states slid from record highs of 113.3 bcfd in August and September to 110.7 bcfd so far in October due to a combination of Isaias shut-ins and force majeure incidents and other problems on pipelines in Kentucky, Texas, West Virginia and elsewhere over the past month or so.
On a daily basis, LSEG said output was on track to drop even further to a four-month low of around 108.9 bcfd on Monday.
With seasonally colder weather coming, LSEG said average gas demand in the Lower 48 states, including exports, will rise from 104.8 bcfd this week to 107.4 bcfd next week. The forecast for next week was lower than LSEG’s outlook on Friday.
Average gas flows to the nine major US LNG export plants fell to 17.4 bcfd so far in October, down from 17.9 bcfd in September and a monthly record high of 18.8 bcfd in April.
On a daily basis, however, output was on track to rise to a five-month high of 18.8 bcfd on Monday with the return to near full service of Freeport LNG’s 2.4-bcfd plant in Texas around October 9 and Berkshire Hathaway Energy’s 0.8-bcfd Cove Point in Maryland around October 12.
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