NEW YORK: US natural gas futures slid about 2% on Wednesday on forecasts for milder weather, lower gas demand next week than previously expected and a decline in the amount of gas flowing to liquefied natural gas (LNG) export plants due to reductions at the Freeport LNG plant in Texas.
Traders noted gas prices declined despite a drop in output this week to a five-month low. After rising for four days in a row, front-month gas futures for October delivery on the New York Mercantile Exchange fell 6.3 cents, or 2.3%, to settle at $2.680 per million British thermal units (mmBtu). On Tuesday, the contract gained 5% to close at its highest price since Sept. 1.
Financial firm LSEG said average gas output in the lower 48 US states has slid to 102.l billion cubic feet per day (bcfd) so far in September, down from a record 102.3 bcfd in August.
Most of that decline occurred this week. On a daily basis, output over the past three days was on track to drop about 3.1 bcfd to a preliminary five-month low of 99.6 bcfd on Wednesday. Energy traders noted preliminary data is often revised later in the day.
Meteorologists forecast the weather would remain mostly near normal for the Sept. 13-21 period before turning warmer than usual from Sept. 22 through at least Sept. 28.
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