US Natgas Prices Edge Down

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.

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.