NEW YORK: US natural gas futures eased to a two-week low on Monday on record output, negative spot prices at the Waha Hub in West Texas and forecasts for the weather to remain mild through the start of April, which should keep the amount of gas utilities pull from storage to heat homes and businesses lower than usual for this time of year.
Gas stockpiles, however, remained about 12% below normal levels for this time of year after extreme cold in January and February forced energy firms to pull massive amounts of gas out of storage, including record amounts in January.
Front-month gas futures for April delivery on the New York Mercantile Exchange were down 2.8 cents, or 0.7%, to $4.076 per million British thermal units (mmBtu) at 8:55 a.m. EDT (1255 GMT), putting the contract on track for its lowest close since February 28.
That futures price decline occurred despite record gas flows to US liquefied natural gas export (LNG) plants and forecasts for more demand this week than previously expected.
In the spot market, gas prices at the Waha Hub in the Permian shale in West Texas turned negative for the first time since November 2024 due to pipeline maintenance that was trapping gas associated with oil production in the basin.
Traders talked of maintenance on US energy firm Kinder Morgan’s El Paso Natural Gas pipe from Texas, New Mexico and Colorado to California and Arizona and WhiteWater, MPLX and Enbridge’s Whistler pipeline from West Texas to the Texas Gulf Coast. With gas futures down about 7% last week, speculators cut their net long futures and options positions on the New York Mercantile and Intercontinental exchanges for a second time in three weeks to the lowest since late February, according to the US Commodity Futures Trading Commission’s Commitments of Traders report.
Financial firm LSEG said average gas output in the Lower 48 US states has risen to 105.9 billion cubic feet per day (bcfd) so far in March, up from a record 105.1 bcfd in February.
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