US Natgas Prices Fall Toward 7-Month Low

US natural gas prices edged up to $3.19 per MMBtu, supported by forecasts for above-normal temperatures in the second half of June, which are expected to boost cooling demand. However, prices remain below the recent highs seen earlier in the month. According to LSEG, average gas production in the US Lower 48 has eased to 108.8 billion cubic feet per day in June, down from 109.7 bcfd in May. While the decline in output has helped narrow the storage surplus, inventories remain about 5% above the five-year seasonal average, pointing to broadly comfortable supply conditions heading into the summer. Meanwhile, net flows to major LNG export terminals have fallen to 16.3 bcfd so far in June from 17.1 bcfd in May, as seasonal maintenance at facilities including Golden Pass and Freeport LNG in Texas continues to weigh on export volumes.

US natural gas prices held onto most of their losses at around $3.14 per MMBtu after retreating from a 16-week high, pressured by ample inventories and weaker LNG export flows. Although lower output in recent weeks has helped reduce the storage surplus, inventories remain around 5% above the five-year seasonal average, indicating broadly comfortable supply conditions heading into the summer period. Adding to this, net flows to major LNG export terminals fell to 16.3 bcfd so far in June from 17.1 bcfd in May, as seasonal maintenance at facilities including Golden Pass and Freeport LNG in Texas continues to limit exports. Still, prices found support from prospects of higher weather-driven demand, with forecasts pointing to mostly above-normal temperatures through June 24.

US natural gas futures fell about 2% to $3.255/MMBtu, pulling back from a more than 16-week high reached in the previous session. LNG export demand softened as average gas flows to the nine major US export terminals declined to 16.4 billion cubic feet per day so far in June from 17.1 bcfd in May, largely due to seasonal maintenance at facilities including Golden Pass and Freeport LNG in Texas. Despite the drop in exports, weather forecasts point to above-normal temperatures through June 20, likely increasing gas consumption for power generation as cooling demand rises. On the supply side, output in the Lower 48 states averaged 108.8 bcfd so far this month, down from 109.7 bcfd in May. Analysts noted that mild spring weather allowed inventories to build at a faster pace than usual, although recent production declines likely narrowed the storage surplus to around 5% above normal from roughly 6% a week earlier. For the week, natural gas prices are down more than 1%.