NEWYORK: US natural gas futures slipped to a one-week low on Tuesday on rising output and expected lower demand over the next two weeks because of increased nuclear and wind power generation.
That price dropped despite rising liquefied natural gas (LNG) exports now that the sixth train at Cheniere Energy Inc's Sabine Pass plant is producing LNG in test mode.
In October global gas prices soared to record highs as power utilities around the world scrambled for LNG cargoes to replenish low stockpiles in Europe and meet rising demand in Asia, where energy shortfalls caused power blackouts in China. Analysts have said that European inventories were about 15% below normal for this time of year, compared with 3% below normal in the United States.
US futures climbed to a 12-year high in early October on expectations for months of strong LNG demand, but overseas prices rose more because the United States has plenty of gas in storage and ample production.
Gas prices in Europe and Asia were still trading about five times higher than in the United States.
Front-month gas futures fell 9.8 cents, or 1.8%, to $5.329 per million British thermal units (mmBtu) at 7:28 a.m. EST (1228 GMT), putting the contract on track to close at its lowest since Nov. 1 for a third day in a row. Data provider Refinitiv said output in the US Lower 48 states has averaged 95.8 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October and a monthly record of 95.4 bcfd in November 2019.
Refinitiv projected average US gas demand, including exports, would jump from 95.8 bcfd this week to 105.1 bcfd next week as the weather turns colder and homes and businesses crank up their heaters.
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