US natgas prices up on output decline

NEW YORK: US natural gas futures edged up about 1% on Tuesday on a drop in output in recent weeks.

That small price increase came despite forecasts for lower demand over the next two weeks than previously expected due in part to a decline in gas flows to liquefied natural gas export plants during the spring maintenance season.

Gas futures for June delivery on the New York Mercantile Exchange fell 4.2 cents, or 1.2%, to $3.688 per million British thermal units at 9:00 a.m. EDT (1300 GMT).

Analysts said mostly mild weather should keep heating and cooling demand low in coming weeks, allowing utilities to continue injecting more gas into storage than normal for this time of year.

Gas stockpiles were already about 3% above the five-year (2020-2024) normal.

Looking ahead, analysts said the roughly 12% drop in US crude futures so far in 2025 should prompt drillers to cut back on oil production.

Any decline in oil production would also reduce the amount of gas pulled out of the ground that is associated with that oil output. About 37% of US gas production comes from associated gas, according to federal energy data. Over time, analysts said any reduction in associated gas output should increase gas prices.

Financial firm LSEG said average gas output in the Lower 48 US states fell to 103.7 billion cubic feet per day so far in May, down from a monthly record of 105.8 bcfd in April.