NEW YORK: US natural gas futures fell on Thursday to a four-week low on forecasts for cooler weather and less air conditioning demand next week than previously expected.
That decline came despite a continued increase in liquefied natural gas exports, record sales to Mexico and a report showing an expected, near-normal storage build last week.
The US Energy Information Administration (EIA) said US utilities injected 70 billion cubic feet (bcf) of gas into storage in the week ended Sept. 4.
That was close to the 68-bcf build analysts forecast in a Reuters poll and compares with an increase of 80 bcf during the same week last year and a five-year (2015-19) average build of 68 bcf.
Front-month gas futures fell 8.3 cents, or 3.4%, to settle at $2.323 per million British thermal units, their lowest close since Aug. 13. That is down 15% from an eight-month high of $2.743 on August 28.
Even though the weather is expected to turn cooler in mid-September, Refinitiv projected US demand would rise to an average of 85.4 billion cubic feet per day (bcfd) next week, from 84.0 bcfd this week, due to an increase in exports. That forecast, however, is lower than Refinitiv's projection on Wednesday.
The amount of gas flowing to US LNG export terminals was on track to rise for a second month in a row in September for the first time since February as Cheniere Energy Inc's Sabine Pass plant in Louisiana ramps up after shutting in late August for Hurricane Laura.
Coronavirus demand destruction caused US LNG exports to drop every month from March to July when flows to plants fell to a 21-month low of 3.3 bcfd as buyers canceled cargoes.
US pipeline exports to Mexico, meanwhile, were on track to rise to 6.1 bcfd in September, which would top August's 5.9-bcfd record.