US Natgas Prices Rebound

US natural gas prices rose to $2.80/MMBtu on Wednesday, recovering from a one-week low reached in the previous session as forecasts for hotter weather lifted expectations for stronger cooling demand. According to the Commodity Weather Group, forecasts shifted toward hotter conditions, with above-average temperatures anticipated across the Gulf, Midwest, and Mid-Atlantic regions from August 30 through September 8. However, price gains were capped by strong domestic production, which added to oversupply concerns. Lower-48 output averaged a record 111.4 bcfd so far in August, up from 110.7 bcfd in July, while inventories remained 6.7% above the five-year seasonal average as of August 14. Softer LNG export activity has also weighed on prices, with average gas flows to the nine major LNG export facilities falling slightly to 17.1 bcfd so far this month from 17.2 bcfd in July, leaving more natural gas available for domestic use.

US natural gas prices fell to around $2.75/MMBtu on Tuesday, retreating after a two-day advance as strong production and ample inventories weighed on the market. Output in the Lower 48 states averaged a record 111.5 bcfd in August so far, up from 110.7 bcfd in July, adding to supply pressure as gas inventories are 6.7% above their five-year seasonal average. At the same time, gas flows to the nine major LNG export facilities eased to 17.1 bcfd so far this month from 17.2 bcfd in July, leaving more natural gas available for domestic consumption. Reports also showed Cheniere Energy’s Corpus Christi LNG plant in Texas continued to record lower natural gas intake, indicating that maintenance work is still ongoing. Meanwhile, weather forecasts turned slightly cooler than previously expected, although above-average temperatures are still forecast across Texas and the Southwest through September 7, keeping demand for cooling elevated.

US natural gas prices held around $2.77/MMBtu as traders balanced hotter weather forecasts against strong production and comfortable inventories. Forecasts turned warmer over the weekend, with above-average temperatures expected across Texas and much of the US through September 7, pointing to stronger demand for gas-fired electricity as air-conditioning use increases. August is also on track to become the hottest population-weighted August on record, according to Commodity Weather Group. On the supply side, output declined over the weekend, particularly in the Appalachian region, where low short-term prices have reduced production incentives. However, overall supply remains robust, with Lower 48 output averaging 111.5 bcfd in August, above July’s record of 110.7 bcfd. Inventories have remained above the five-year average since March, limiting the impact of stronger summer demand. Meanwhile, average gas flows to the nine major US LNG export facilities stood at about 17.1 bcfd.