NEW YORK: US natural gas futures held steady on Tuesday as a bearish drop in oil prices offset bullish forecasts for warmer weather and more gas demand this week than previously expected.
Oil prices fell nearly 3 percent on Tuesday to a fresh three-month low as markets weighed the prospects for a resumption of supplies through the Strait of Hormuz alongside weaker physical demand and scant details on a preliminary deal to end the US-backed war with Iran.
Front-month gas futures for July delivery on the New York Mercantile Exchange rose 0.6 cent, or 0.2 percent, to USD3.153 per million British thermal units (mmBtu).
Looking ahead, the premium of futures for August over July fell to around 2 cents per mmBtu, its lowest since June 2024. In the cash market, spot prices for Tuesday at the Waha Hub in West Texas turned positive for the first time since early February as demand for the fuel rises with the coming of the summer air conditioning season and as energy firms wrap up their spring pipeline maintenance.
Financial group LSEG said average gas output in the US Lower 48 states has fallen to 109.3 billion cubic feet per day (bcfd) so far in June, down from 109.7 bcfd in May and a monthly record high of 110.6 bcfd in December 2025. The average so far for June is higher than the figure on Wednesday.
Analysts said mild weather in recent months allowed energy firms to inject more gas than usual into storage. They projected the surplus of gas in inventory would rise to 6.1 percent above normal during the week ended June 12, up from about 6.0 percent above normal in the previous week.
Meteorologists forecast the weather will remain mostly warmer than normal through July 1, which should boost the amount of gas that power generators burn to keep air conditioners humming. About 40 percent of US power generation comes from gas-fired plants.
But with the coming of slightly cooler weather next week, LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 104.6 bcfd this week to 103.2 bcfd next week. The forecast for this week was higher than LSEG’s outlook on Monday.
Comments