US natgas falls with crude after Trump tests positive for coronavirus

US natural gas futures slipped over 3% on Friday as the gas market followed crude futures lower after President Donald Trump tested positive for coronavirus.

Traders noted gas was also weighed down by continued weakness from in the cash market despite a continued rise in liquefied natural gas (LNG) exports.

Front-month gas futures on the New York Mercantile Exchange (NYMEX) fell 8.9 cents, or 3.5%, to settle at $2.438 per million British thermal units.

For the week, the front-month gained about 14%, its highest in a week since August.

Next-day gas at the Henry Hub benchmark in Louisiana, meanwhile, has traded below futures since August.

"The cash market's depressed trading signals a broader weakness that will need to be mitigated before NYMEX trading can strengthen," said Daniel Myers, market analyst at Gelber & Associates in Houston.

Data provider Refinitiv said output in the Lower 48 US states averaged 86.4 billion cubic feet per day (bcfd) so far in October, down from a four-month low of 87.2 bcfd in September.

Those production declines come as low prices earlier in the year due to coronavirus demand destruction caused energy firms to shut wells and cut back on new drilling so much that output from new wells no longer offsets existing well declines.

With cooler weather coming, Refinitiv projected demand, including exports, would rise from 83.3 bcfd this week to 85.6 bcfd next week and 85.7 bcfd in two weeks. That, however, was lower than Refinitiv's forecasts on Thursday.

The amount of gas flowing to LNG export plants has averaged 6.7 bcfd so far in October, up from 5.7 bcfd in September. Traders expect LNG exports to keep rising as Cameron and Cove Point return over the next week or two and rising global gas prices prompt buyers to reverse some earlier planned cargo cancellations.