Natural gas Hits 4-week Low

US natural gas prices hovered around $3.15 per MMBtu after falling more than 3% in the previous session, weighed down by abundant stockpiles and cooler weather pointing to softer demand. Weather forecasts indicate below-average temperatures across the Mid-Atlantic region between June 23 and 27, likely curbing air-conditioning-driven power demand. The cooler outlook follows a mild spring that enabled energy companies to build larger-than-usual gas inventories, with stockpiles currently around 5.8% above normal. In addition, recent maintenance-related reductions in gas flows to US LNG export terminals have redirected more supply to the domestic market. This added availability has more than offset a slight dip in production, with output in the Lower 48 states slipping to 109.5 bcfd so far in June from 109.7 bcfd in May.

US natural gas prices declined to $3.2 per MMBtu due to ample storage volumes and updated weather forecasts predicting cooler temperatures. Forecasters expect below-average temperatures in the mid-Atlantic region from June 23 to 27, which will likely reduce power demand for air conditioning. This weather shift follows a mild spring that allowed energy companies to aggressively stockpile gas, keeping domestic inventories approximately 5.8% above normal levels. Furthermore, a reduction in gas flows to US liquefied natural gas export terminals has diverted more supply into the domestic market. This increased availability has overshadowed a slight decline in production, as average daily gas output in the Lower 48 states dipped to 109.5 billion cubic feet so far in June from 109.7 billion cubic feet in May.

US natural gas prices hovered around $3.25 per MMBtu, the highest in more than two weeks, amid higher gas flows to LNG export facilities and forecasts of warmer weather. Average flows to major LNG export terminals edged up to 17.2 bcfd so far in June from 17.1 bcfd in May, as liquefaction units, including those at Freeport LNG, returned from maintenance outages. At the same time, forecasts indicate temperatures will remain above normal through July 7, likely increasing gas demand from power generators as air conditioning use rises. On the supply side, average production in the Lower 48 states remained unchanged at 109.7 bcfd so far in June. Inventories remained around 5.8% above normal as of the week ending June 19, signaling a well-supplied market. Separately, two LNG carriers were reportedly en route directly from the US to China.