NEW YORK: US natural gas futures fell for a second straight session on Monday, slipping nearly 5% as higher production continued to weigh on prices.
Front-month gas futures for September delivery on the New York Mercantile Exchange were down 15.1 cents, or 4.9%, to $2.93 per million British thermal units as of 10:50 a.m. EDT (1450 GMT).
“Strong US production is going to continue and that is kind of a negative for prices,”
said Phil Flynn, senior analyst for Price Futures Group.
“If prices go below $3, we think it’ll be short-lived for the next couple weeks, but if we don’t see hot weather develop, then we will go south of $3.”
LSEG said average gas output in the Lower 48 so far in August stood at 107.9 billion cubic feet per day, compared with the monthly record of 107.6 bcfd set in July.
Energy services firm Baker Hughes said in its closely watched report on Friday that US gas rigs rose by two to 124 last week, the highest level since August 2023.
Last week, the US Energy Information Administration said energy firms added 48 billion cubic feet of gas to storage during the week ended July 25.
That figure was much bigger than the 37 bcf build analysts forecast in a Reuters poll.
“A strong price rally toward the $3.50 area cannot be ruled out should the temperatures show another period of extreme heat amid some injection of storm premium, especially if European gas demand increases in response to the US tariff factor
and possible Russian sanctions,” analysts at energy advisory firm Ritterbusch and Associates said in a note.
There is some storm activity in the Atlantic, but none of it is currently impacting the Gulf of Mexico, a key hub for US oil and natural gas production and refining.
US liquefied natural gas company Freeport LNG’s export plant in Texas was taking on more natural gas on Monday in a sign that the plant exited an outage over the weekend, according to a company filing with state regulators and gas flow data from financial company LSEG.
Elsewhere, Equinor restarted its Hammerfest LNG terminal on Sunday, Europe’s largest natural gas export facility, after more than three months of maintenance.
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