US natgas futures down

NEW YORK: US natural gas futures slid about 2% to a one-week low on Wednesday as drillers keep pulling record amounts of gas out of the ground, mild weather kept demand low and the amount of gas flowing to liquefied natural gas (LNG) export plants declined as units shut for spring maintenance.

Front-month gas futures for June delivery on the New York Mercantile Exchange fell 4.4 cents, or 2.0%, to settle at $2.170 per million British thermal units (mmBtu), their lowest close since April 26.

That also puts the front-month down for a third day in a row for the first time since late March.

Data provider Refinitiv said average gas output in the US Lower 48 states rose to 101.5 billion cubic feet per day (bcfd) so far in May, up from a record 101.4 bcfd in April.

Meteorologists projected the weather would be mostly near normal in the Lower 48 states through May 18 with equal amounts of heating and cooling degree days.

Heating degree days (HDDs) measure the number of degrees a day’s average temperature is below 65 degrees Fahrenheit (18 degrees Celsius) to estimate demand to heat homes and businesses. Cooling degree days (CDDs) measure the number of degrees a day’s average temperature is above 65 F to estimate demand to cool homes and businesses.

With the weather turning seasonally warmer, Refinitiv forecast US gas demand, including exports, would slide from 95.0 bcfd this week to 90.5 bcfd next week. Those forecasts were lower than Refinitiv’s outlook on Tuesday.

Gas flows to the seven big US LNG export plants slid to an average of 13.0 bcfd so far in May, down from a record 14.0 bcfd in April. The decline was due mostly to reductions at a couple of facilities in Louisiana: Cameron LNG and Cheniere Energy Inc’s Sabine Pass.

Last month’s record was higher than the 13.8 bcfd of gas the seven plants can turn into LNG since the facilities also use some of the fuel to power equipment used to produce LNG.

In New York, Governor Kathy Hochul and the state legislature passed a budget that makes New York the first state to ban the installation of fossil-fuel equipment, including gas furnaces and stoves, in most new buildings starting in 2026. Hochul and some legislators tried but failed to pass a similar ban in 2022.

Separately, US President Joe Biden’s administration proposed the Digital Asset Mining Energy (DAME) excise tax, in which crypto miners would face a tax equal to 30% of the cost of the electricity they use. The excise tax was also included in the president’s proposed 2024 budget in March.