US natgas futures slide to 7-week low as output rises after Hurricane Sally

US natural gas futures slipped 2% on Friday to a seven-week low with output rising as Gulf of Mexico producers return wells shut for Hurricane Sally.

That price decline came despite an increase in US liquefied natural gas exports to their highest since April as rising global prices in Europe and Asia make US gas more attractive.

Front-month gas futures fell 4 cents, or 2.0%, to $2.002 per million British thermal units (mmBtu) at 9:20 a.m. EDT (1320) GMT, their lowest since July 31 for a second day in a row.

That puts the front-month down about 27% over the past three weeks since hitting an eight-month high of $2.743 per mmBtu on Aug. 28, causing the premium of November futures over October to rise to a record high of 59 cents.

Data provider Refinitiv said output in the Lower 48 US states rose to 86.3 billion cubic feet per day (bcfd) on Thursday from a three-month low of 84.8 bcfd on Wednesday when Sally hit the Gulf Coast.

With cooler weather coming, Refinitiv projected demand, including exports, would fall from an average of 85.5 bcfd this week to 82.7 bcfd next week before rising to 83.9 bcfd in two weeks as LNG exports increase.

The amount of gas flowing to US LNG export plants was on track to reach 7.6 bcfd on Friday, its highest in a day since April. For the month, LNG feedgas averaged 5.5 bcfd so far in September. That was up for a second month in a row for the first time since hitting a record 8.7 bcfd in February.

Cameron LNG's export plant in Louisiana, however, remained shut since Aug. 27 due to lingering power outages from Hurricane Laura. Entergy Corp, the local power company, said it expects to restore service near the plant on Sept. 20.