US Natgas Prices Extend Retreat

US natural gas futures dropped nearly 2% to around $3.17 per MMBtu, extending their retreat from a 16-week high, as ample inventories and weaker LNG export flows weighed on prices. 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 16.4 bcfd so far in June from 17.1 bcfd in May as seasonal maintenance at several facilities continues to constrain exports. Still, prices found support from prospects of higher weather-driven demand, with forecasts pointing to mostly above-normal temperatures through June 20.

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%.

Natural gas increased 5.02% to 3.3753 USD/MMBtu