NEW YORK: US natural gas futures fell to a ten-month low on Monday, pressured by cooler weather forecasts and fading summer demand, easing concerns over tight storage levels ahead of winter.
Front-month gas futures for September delivery on the New York Mercantile Exchange were flat at USD2.70 per million British thermal units at 10:09 a.m. EDT (1410 GMT). The contract hit its lowest since November 4, 2024.
“With summer waning, it is becoming clear that the expectation of strong power sector demand and growing exports limiting injections and giving us a below normal storage level to enter winter is simply not going to manifest,” said Gary Cunningham, director of market research at Tradition Energy.
“Weather over the next two weeks now looks to be firmly cooler than normal, limiting late-season cooling demand. There is also little impactful activity in the Atlantic basin tropics, with nothing likely to form in the next seven days.”
Last week, the US Energy Information Administration said energy firms added 13 billion cubic feet of gas to storage during the week ended August 15.
That was smaller than the 22-bcf build analysts had forecast in a Reuters poll, and compares with an increase of 29 bcf during the same week last year and an average build of 35 bcf over the 2020 to 2024 period. Analysts said the smaller-than-usual build reflected increased cooling demand during hot weather last week. The price decline came despite an increase in daily gas flows to liquefied natural gas export plants as some units exited brief outages in recent days.
The average amount of gas flowing to the eight big US LNG export plants has risen to 15.9 bcfd so far in August, up from 15.6 bcfd in July. That compares with a record monthly high of 16.0 bcfd in April.
Financial firm LSEG said average gas output in the Lower 48 states had risen to 108.5 billion cubic feet per day so far in August, up from a record monthly high of 107.8 bcfd in July.
LSEG projected average gas demand in the Lower 48 states, including exports, would ease from 111.0 bcfd this week to 106.5 bcfd next week and 104.0 bcfd in two weeks. The forecasts for this week and next were similar to LSEG’s outlook on Friday.
US LNG exports will soar by roughly 10 percent a year through 2030 as energy firms double their production capacity, according to analysts, providing a shot in the arm to the country’s maturing shale industry, which has seen growth slow and costs rise.
The US is the world’s largest oil and natural gas producer, but many of its best drilling locations have been tapped. While oil production is expected to plateau or fall in coming months, gas remains a bright spot for the industry thanks primarily to the country’s booming exports.
In the tropics, the US National Hurricane Center projected no disturbances in the Atlantic Ocean. Tropical Storm Fernand, which formed south-southeast of Bermuda on Saturday, was expected to weaken beginning Monday night and become post-tropical on Wednesday.
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