NEW YORK: US natural gas futures held near a recent two-month low on Tuesday on rising output, a decline in liquefied natural gas (LNG) export flows, and as a tropical storm in the Gulf of Mexico helps to lower demand forecasts.
Front-month gas futures for August delivery on the New York Mercantile Exchange fell 0.2 cent, or 0.1 percent, to USD2.858 per million British thermal units (mmBtu). That matched the close on July 16, which was its lowest settle since May 12.
In the Gulf of Mexico, the US National Hurricane Center said Tropical Storm Bertha would move west across the northern Gulf Coast and hit Louisiana on Wednesday near the mouth of the Mississippi River close to where Venture Global LNG’s Plaquemines export plant is located.
After crossing southern Louisiana, Bertha is expected to weaken into a tropical depression as it keeps moving west toward Texas, crossing almost all of the other Gulf Coast LNG export plants except Cheniere Energy’s Corpus Christi, which is further south along the Texas coast.
Energy analysts noted the storm would likely reduce gas demand by bringing cooler, rainy weather and knocking out power to homes and businesses and possibly causing some LNG export plants to reduce output.
Plaquemines LNG, however, was on track to take in more gas on Tuesday with feedgas rising to 3.8 bcfd on July 21, up from 3.6 bcfd on July 20. There were no major changes in flows at any of the other Gulf Coast LNG export plants, according to data from financial firm LSEG.
The analysts noted that tropical storms could disrupt gas flows on pipelines but usually do not reduce output by much, since most US gas production is located far inland in the Marcellus/Utica shale in Pennsylvania, Ohio, and West Virginia and the Permian basin in West Texas and New Mexico.
Only about 2 percent of total US gas output comes from the federal offshore Gulf of Mexico.
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