NEW YORK: US natural gas futures slid about 2% to a two-month low on Wednesday along with oil prices on worries US President Donald Trump’s tariffs could reduce global economic growth and demand for energy.
That price decline occurred despite a decline in gas output in recent days, forecasts for more gas demand over the next two weeks than previously expected and record gas flows to liquefied natural gas (LNG) export plants.
Gas futures for May delivery on the New York Mercantile Exchange fell 6.8 cents, or 2.0%, to 3.397 per million British thermal units, putting the contract on track for its lowest close since February 7.
That put the front-month down for a fourth day in a row for the first time since October 2024, and kept it in technically oversold territory for a second day in a row for the first time since January. The contract has lost about 18% during those four days.
Also weighing on prices, energy traders said mild weather and low demand last month likely allowed utilities to add gas to storage in March for the first time since 2012 and only the second time in history.
Gas stockpiles, however, were still about 3% below normal levels for this time of year after cold weather in January and February forced energy firms to pull large amounts of gas out of storage, including record amounts in January.
Financial firm LSEG said average gas output in the Lower 48 US states has fallen to 105.9 billion cubic feet per day so far in April, down from a monthly record of 106.2 bcfd in March.
On a daily basis, output was on track to drop by 3.7 bcfd over the past four days to a preliminary six-week low of 103.4 bcfd on Wednesday. Analysts have said preliminary data is often revised later in the day.
Looking forward, analysts noted a 23% drop in US crude futures over the past five days to a four-year low on Wednesday could prompt energy firms to cut back on oil drilling.
Any reduction in oil drilling in shale basins like the Permian in Texas and New Mexico and the Bakken in North Dakota could cut gas output associated with that oil production.
Meteorologists projected temperatures in the Lower 48 states would remain mostly near-normal through April 24.
With seasonally mild weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will fall from 109.5 bcfd this week to 101.2 bcfd next week. Those forecasts were higher than LSEG’s outlook on Tuesday.
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