NEW YORK: US natural gas futures fell to a more than two-week low on Friday, on expectations of weak demand heading into a seasonally slow season and as relief from heat waves raised the prospect of less consumption for cooling.
Front-month gas futures for September delivery on the New York Mercantile Exchange settled 7 cents, or 2.7% lower, at $2.551 per million British thermal units (mmBtu). The contract was on track to post a weekly decline of about 8%.
Gas prices are drifting back down on some expected temperature moderation as production maintains at a lofty level, analysts at Ritterbusch and Associates said in a note.
Meteorologists forecast the weather in the Lower 48 states will remain hotter than normal through at least Sept. 2, but, deviations from normal are declining.
The US Energy Information Administration (EIA) said utilities added 35 billion cubic feet (bcf) of gas into storage during the week ended Aug. 11, filling stockpiles to 3,065 bcf. That was 10.8% above the five-year (2018-2022) average.
Refinitiv said average gas output in the Lower 48 states was 101.7 bcfd so far in August, nearly the same as the 101.8 bcfd in July, and not far from a monthly record of 102.2 bcfd in May.
Data provider Refinitiv forecast US gas demand, including exports, would mostly remain unchanged from 103.6 billion cubic feet per day (bcfd) this week to 103.8 bcfd next week.
Gas flows to the seven big US LNG export plants have fallen from an average of 12.7 bcfd in July to 12.4 bcfd so far in August, mainly due to reductions at Venture Global LNG’s Calcasieu facility in Louisiana. That compares with a monthly record of 14.0 bcfd in April.
However, if hot weather patterns persist and there is a possible disruption in the Gulf of Mexico production as a result of an active hurricane season, injections next month could be lower than normal, Ritterbusch’s note added.
Comments
Comments are closed.