US natgas futures fall about 2pc on surplus, contract expiry

US natural gas futures slid nearly 2% in volatile trading on Monday, their last day as the contract for October delivery, on a continued supply surplus and as threat of storms in the Atlantic Ocean dissipated.

The decline in futures prices came despite a projected increase in LNG exports.

Front-month gas futures for October delivery fell 3.8 cents, or 1.8%, to settle at $2.101 per million British thermal units (mmBtu).

The October contract rose as much as 1.7% and fell as much as 5.6% in Monday's session.

"It is expiration jiggling," said Phil Flynn, a senior analyst at Price Futures Group in Chicago, adding some roll over activity also contributed to the volatility.

November futures, which will be the front-month beginning on Tuesday, were down 1.2 cents, or 0.4%, to settle at $2.795 per mmBtu.

"Although the long-standing supply surplus will likely be contracting significantly next month, we still see a possible season ending supply of almost 4.1 tcf should next month's temperatures remain mild," advisory firm Ritterbusch and Associates said in a note.

"... The Atlantic remains devoid of any threatening tropical storm development in possibly forcing the complex to erase some additional storm premium."

Data provider Refinitiv projected supply would rise from 91.1 billion cubic feet per day (bcfd) last week to 91.2 bcfd this week, before contracting to 91.1 bcfd again in the next week.

LNG exports were forecast to reach 6.2 bcfd this week, according to Refinitiv data, as vessels returned to Gulf Coast terminals after Tropical Storm Beta dissipated.