NEW YORK: US natural gas futures eased about 1percent on Thursday on record output, lower flows to liquefied natural gas (LNG) export plants and ample amounts of gas in inventory ahead of a weekly report expected to show another bigger-than-usual storage build.
Analysts forecast energy firms added 35 billion cubic feet (bcf) of gas to storage during the week ended July 24. That compares with an increase of 44 bcf during the same week last year and a five-year (2021-2025) average increase of 26 bcf for the period.
On its first day as the front-month, gas futures for September delivery on the New York Mercantile Exchange (NYMEX) fell 3.9 cents, or 1.4percent, to USD2.686 per million British thermal units (mmBtu).
That pushed the front-month back into technically oversold territory for the third time in four days.
Financial firm LSEG said average gas output in the US Lower 48 states rose to 110.7 billion cubic feet per day (bcfd) so far in July, up from 110.0 bcfd in June and the monthly record high of 110.6 bcfd in December 2025.
Analysts said gas inventories have remained higher than the five-year (2021-2025) average since the spring when the weather was mild, allowing energy firms to stockpile more gas than usual.
Now, as they wait for a federal report on Thursday, analysts projected the amount of gas in storage likely rose to 6.6percent above normal during the week ended July 24, up from 6.4percent above normal during the previous week.
That inventory surplus has continued due in part to near-record output despite weeks of above-normal temperatures so far this summer.
Meteorologists forecast the weather would remain mostly warmer than normal through August 14, forcing power generators to continue burning 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 rise from 111.7 bcfd this week to 112.5 bcfd next week. The forecast for this week was higher than LSEG’s outlook on Wednesday. Average gas flows to the nine big US LNG export plants eased to 17.2 bcfd so far in July due in part to maintenance at Freeport LNG’s 2.4-bcfd plant in Texas, down from 17.4 bcfd in June and a monthly record high of 18.8 bcfd in April.
The US became the world’s biggest LNG exporter in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more low-cost US gas. Global gas prices have spiked in recent years primarily due to supply disruptions linked to Russia’s invasion of Ukraine in 2022 and the US-Israeli war with Iran this year.
Around the world, gas was trading around USD20 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and USD21 at the Japan-Korea Marker (JKM) benchmark in Asia.
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