NEW YORK: US natural gas futures eased about 1percent to a two-month low on Tuesday on rising output and an expected decline in flows to liquefied natural gas (LNG) export plants during maintenance at Freeport LNG in Texas.
Front-month gas futures for August delivery on the New York Mercantile Exchange fell 2.7 cents, or 0.9percent, to USD2.87 per million British thermal units (mmBtu), putting the contract on track for its lowest close since May 13.
That also put the front-month down for five days in a row and kept it in technically oversold territory for a second day in a row, both for the first time since April.
In a sign the market is not too worried about gas supplies in coming months, the premium of futures for March over April 2027 fell to a record low of around 18 cents per mmBtu.
The industry calls the March-April spread the “widow-maker” because rapid price moves resulting from changing weather forecasts have forced some speculators out of business. Notably, the Amaranth hedge fund lost more than USD6 billion in 2006.
Traders use the March-April and October-November spreads to bet on winter weather forecasts and supply and demand. March is the last month of the winter heating season when utilities pull gas out of storage, and October is the last month of the summer cooling season when utilities inject gas into storage.
Financial group LSEG said average gas output in the US Lower 48 states rose to 110.2 billion cubic feet per day (bcfd) so far in July, up from 110.0 bcfd in June, but remained below the monthly record high of 110.6 bcfd in December 2025.
Analysts said mostly mild weather during the spring allowed energy firms to stockpile more gas than usual. As they wait for a federal report on Thursday, they projected the amount of gas in storage held at 6.6percent above normal during the week ended July 10, the same as the previous week.
Meteorologists forecast the weather would remain mostly warmer than normal through July 29, forcing power generators to burn lots of gas to keep air conditioners humming. About 40percent of US power generation comes from gas-fired plants.
LSEG projected average gas demand in the Lower 48 states, including exports, would hold around 110.4 bcfd this week and next. Those forecasts were higher than LSEG’s outlook on Tuesday.
Average gas flows to the nine big US LNG export plants rose to 17.6 bcfd so far in July, up from 17.4 bcfd in June, but remain below the monthly record high of 18.8 bcfd in April.
That increase in average LNG feedgas came despite the reduction in flows to Freeport LNG’s 2.4-bcfd export plant in Texas for planned work from July 10 to late August.
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