US Natgas Prices Ease

US natural gas prices dropped to $3.23 per MMBtu after hitting a more than two-week high in the previous session on 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.

US natural gas prices rose to $3.27 per MMBtu after the latest EIA report showed a slightly smaller-than-expected increase in storage. US energy companies added 73 billion cubic feet of gas to inventories in the week ended June 12, below forecasts for a 75 bcf build. The increase compares with a 97 bcf injection during the same week last year and matches the five-year average for the period. Total stockpiles climbed to 2.759 trillion cubic feet, around 1% below last year’s level but 5.8% above the five-year average. The latest build also slowed from the previous week’s 108 bcf increase. Warmer-than-normal temperatures are expected through July 3, supporting demand from power generators as air conditioning usage rises. Meanwhile, average gas flows to the nine major US LNG export facilities remained steady at 17.1 bcfd in June, unchanged from May due to ongoing maintenance. US Lower 48 production has eased slightly, averaging 109.4 bcfd so far in June compared with 109.7 bcfd in May.

US natural gas prices fell more than 3% to $3.12 per MMBtu on Wednesday after three consecutive sessions of gains, as traders weighed demand expectations, weather forecasts and supply trends. Temperatures are expected to remain above normal through July 1, which could support stronger gas consumption from power generators as air conditioning demand increases. However, LNG export activity has softened, with average gas deliveries to the nine major US LNG export terminals declining to 17.0 billion cubic feet per day so far in June due to seasonal maintenance at several facilities, including ExxonMobil and QatarEnergy’s Golden Pass project and Freeport LNG in Texas. Domestic supply has also edged lower, with US Lower 48 gas production averaging 109.3 bcfd in June, down from 109.7 bcfd in May.