NEW YORK: US natural gas futures dropped over 4% on Monday as output slowly rises and cooling demand eases, keeping the amount of gas utilities inject into storage on track to reach a record high this year.
Even though meteorologists projected temperatures will remain warmer-than-normal through at least mid-August, they also predicted the hottest days of summer were past. The weather over much of the United States has been hotter-than-normal every day since late June.
"Natural gas prices are in trouble as the heatwave could break," Phil Flynn, senior analyst at Price Futures Group in Chicago, said, advising traders to "buy puts."
Front-month gas futures fell 7.4 cents, or 4.1%, to settle at $1.734 per million British thermal units, which is only the lowest close since July 22 after the contract gained over 5% last week.
Refinitiv said production in the Lower 48 US states averaged 88.5 billion cubic feet per day (bcfd) in July, up from a 20-month low of 87.0 bcfd in June but still well below the all-time monthly high of 95.4 bcfd in November.
Refinitiv projected US demand, including exports, will slide from 91.5 bcfd this week to 90.8 bcfd next week.
Pipeline gas flowing to US LNG export plants averaged 3.3 bcfd (34% utilization) so far in July, down from a 20-month low of 4.1 bcfd in June and a record 8.7 bcfd in February. US pipeline exports, meanwhile, rose as consumers in neighboring countries cranked up their air conditioners.
Comments
Comments are closed for this article.