US Natgas Prices Fall after EIA Report

US natural gas prices fell below $2.80/MMBtu, extending their retreat from an eight-week high, as abundant domestic supplies and solid production weighed on the market. US gas inventories were 5.2% above the five-year seasonal average as of August 28, while output across the Lower 48 rose to 112.9 bcfd so far in September from August’s monthly high of 112.2 bcfd, reinforcing the supply overhang. These supply-side factors offset support from stronger demand. Forecasts for above-average temperatures expected across the South and Southeast through September 18 are expected to keep air-conditioning demand elevated, supporting natural gas consumption in the power sector. At the same time, gas flows to the nine major LNG export plants increased to 18.1 bcfd in September from 17.2 bcfd in August. Demand for US LNG from Europe and Asia has also risen sharply as buyers seek to replace disrupted Middle Eastern supplies and replenish inventories ahead of the winter heating season.

US natural gas prices remained above $2.90/MMBtu, not far from two-month highs, as traders balanced stronger cooling demand and rising LNG exports against plentiful domestic supplies. Persistent heat across the continental US continued to boost air-conditioning demand, supporting gas consumption in the power sector. Meanwhile, average feedgas flows to the nine major LNG export facilities climbed to 18.3 bcfd in early September from 17.2 bcfd in August, as facilities in Texas returned to full operations after maintenance. Export demand also strengthened in Europe and Asia, where buyers are replenishing inventories ahead of the winter heating season amid ongoing disruptions to LNG supplies from the Persian Gulf. However, high domestic production and comfortable storage levels limit further price gains. US gas inventories stood 5.2% above the five-year seasonal average as of August 28, while output across the Lower 48 remained close to record levels, keeping the market well supplied.

US natural gas prices rose 2% to $2.97 per MMBtu on Friday after sliding 1.5% in the prior session, as investors weighed warm weather forecasts and improving LNG export activity against ample domestic supplies. Hot weather across the continental US kept cooling demand elevated, supporting gas consumption for power generation. At the same time, average gas flows to the nine major LNG export plants rose to 18.3 bcfd in early September, up from 17.2 bcfd in August, as major facilities in Texas returned to full operations after maintenance. The developments coincided with stronger demand for US LNG in Europe and Asia, where buyers are seeking supplies to refill storage ahead of the winter heating season, amid continued disruptions to LNG flows from the Persian Gulf. Still, abundant domestic supplies are limiting the upside for prices. Gas inventories were 5.2% above their five-year seasonal average as of August 28, while average output in the Lower 48 states remained at record highs.