US Natgas Prices Ease from 3-Month High

US natural gas futures fell more than 3% to below $3.2 per MMBtu, retreating from a nearly three-month high of $3.29 reached in the previous session as traders reassessed supply and demand conditions. Weather forecasts continue to point to mostly above-normal temperatures through June 13, a trend that could boost gas consumption from power generators as air conditioning demand rises. On the supply side, gas production in the Lower 48 states averaged 109.4 billion cubic feet per day in May, slightly below April’s 109.8 bcfd. Meanwhile, flows to major US LNG export facilities declined to 17.1 bcfd from a record 18.8 bcfd in April due to seasonal maintenance work at several plants. Despite the latest pullback, US natural gas prices surged 18.9% in May, following a 4.1% decline in April.

US natural gas futures rose further to $3.37 per MMBtu, the highest level since early February, amid expectations of stronger demand over the next two weeks. Forecasts indicate mostly above-normal temperatures through June 13, increasing the likelihood that power generators will consume more gas to meet rising air-conditioning demand. Additional support came from the latest EIA report, which showed a smaller-than-expected increase in gas storage inventories. On the supply side, gas production in the Lower 48 states averaged 109.4 billion bcfd in May, down from 109.8 bcfd in April, providing further upward pressure on prices. Meanwhile, flows to major LNG export plants dropped to 17.1 bcfd in May from a monthly record high of 18.8 bcfd in April due to seasonal maintenance at several plants. US gas prices rallied 18.9% in May, after a 4.1 % drop in April.

Natural gas increased 5.02% to 3.2505 USD/MMBtu