NEW YORK: US natural gas futures eased about 1 percent to a one-week low on Monday on a small output increase in recent days and ample amounts of fuel in storage.
That small price decline came despite forecasts for colder weather and more demand over the next two weeks than previously expected, and near-record flows of gas to liquefied natural gas (LNG) export plants.
Front-month gas futures for November delivery on the New York Mercantile Exchange fell 2.8 cents, or 0.9percent, to USD3.276 per million British thermal units (mmBtu), putting the contract on track for its lowest close since October 17 for a third day in a row.
The US National Hurricane Center projected Hurricane Melissa would batter Jamaica, Cuba, the Bahamas and Bermuda as it moves northeast from the Caribbean Sea into the Atlantic Ocean over the next week. The system is not currently expected to hit the US mainland during that time.
Even though storms can boost US gas prices by cutting output along the US Gulf Coast, they are more likely to reduce prices by shutting LNG export plants and knocking out power to homes and businesses. About 40percent of the power generated in the US comes from gas-fired plants.
LSEG said average gas output in the Lower 48 states fell to 107.0 billion cubic feet per day (bcfd) so far in October, down from 107.5 bcfd in September and a record monthly high of 108.0 bcfd in August.
On a daily basis, however, output has held near a three-week high of around 108.0 bcfd over the past four days. That compares with a daily record high of 109.2 bcfd on July 28.
Record output earlier this year allowed energy companies to inject more gas into storage than usual. There is currently about 5percent more gas in storage than normal for this time of year.
Meteorologists forecast temperatures across the country will remain mostly near normal through November 11.
With the weather turning seasonally colder, LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 108.7 bcfd this week to 109.4 bcfd next week. Those forecasts were higher than LSEG’s outlook on Friday.
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