NEW YORK: US natural gas futures slid about 3 percent to a one-week low on Wednesday on recent declines in gas flows to liquefied natural gas export plants, forecasts for lower demand next week than previously expected, and ample supplies of gas in storage.
Front-month gas futures for October delivery on the New York Mercantile Exchange were down 10.4 cents, or 3.3 percent, to USD3.013 per million British thermal units at 8:50 a.m. EDT (1250 GMT), putting the contract on track for its lowest close since September 3. On Tuesday, the contract closed at its highest price since July 22.
That price drop, which pushed the contract out of technically overbought territory, occurred despite recent declines in output.
Financial firm LSEG said average gas output in the Lower 48 states has fallen to 107.4 billion cubic feet per day so far in September, down from a record monthly high of 108.3 bcfd in August.
On a daily basis, output was on track to drop to a preliminary two-month low of 106.3 bcfd on Wednesday due primarily to declines in Pennsylvania and West Virginia, down from an average of 107.3 bcfd over the prior seven days. That compares with a daily record high of 109.6 bcfd on July 29.
Record output so far this year has allowed energy companies to inject more gas into storage than usual this summer. There was about 6 percent more gas in storage than normal for this time of the year, and analysts said they expect that percentage to grow in coming weeks.
Meteorologists forecast the weather will remain warmer than normal through at least September 25, offsetting the usual rise in heating demand that starts around this time of year. Homes and businesses burn more gas for heating during the winter than power companies burn in generating plants to produce electricity for air conditioning.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 101.0 bcfd this week to 103.0 bcfd next week. The forecast for next week was lower than LSEG’s outlook on Tuesday.
The average amount of gas flowing to the eight big US LNG export plants has eased to 15.6 bcfd so far in September, down from 15.8 bcfd in August. That compares with a monthly record high of 16.0 bcfd in April.
On a daily basis, LNG export feedgas was on track to fall to a three-week low of 14.9 bcfd on Wednesday due to recent decreases at several plants, including Cheniere Energy’s 3.9-bcfd Corpus Christi facility in Texas and 4.5-bcfd Sabine in Louisiana, Venture Global LNG’s 1.6-bcfd Calcasieu in Louisiana and Freeport LNG’s 2.1-bcfd plant in Texas.
That figure compares with a daily LNG feedgas record of 17.3 bcfd on April 9.
In other LNG news, Berkshire Hathaway Energy’s 0.8-bcfd Cove Point plant in Maryland is scheduled to shut around September 15 for about a month of planned annual autumn maintenance. .
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