NEW YORK: US natural gas futures fell nearly 3percebt on Thursday as a recovery in domestic output offset support from stronger LNG exports, while investors awaited a federal storage report for fresh clues on supply-demand balances ahead of winter.
On its first day as the front-month, gas futures for December delivery on the New York Mercantile Exchange traded 8.5 cents lower, or 2.8percebt, to USD2.95 per million British thermal units.
“While export activity has lifted since last week, much of this gain has been offset by a near record pace of production as record oil output is spilling into strong associated gas production that will remain as a headwind to higher prices well into the winter period. ,” Ritterbusch and Associates said in a note.
Financial firm LSEG said average gas output in the US Lower 48 states has slid to 112.1 billion cubic feet per day (bcfd) so far in October, down from record highs of 113.3 bcfd in both August and September.
On a daily basis, however, output has recovered to an average of around 113.3 bcfd over the past week.
Average gas flows to the nine major US LNG export plants has risen to 18.5 bcfd so far in October, up from 17.9 bcfd in September. That figure is still below the monthly record high of 18.8 bcfd in April.
Looking ahead, meteorologists predicted weather across the country would remain mostly milder than normal through November 13, which should keep heating demand lower than usual in coming weeks. Still, with seasonally colder weather coming, LSEG said average gas demand in the Lower 48 states, including exports, would rise from 106.4 bcfd this week to 108.6 bcfd next week. Dutch and British gas prices fell back below €100 on Thursday morning on renewed hopes of peace talks to ease the conflict in the Middle East and as flows from Norway rose.