US Natgas Prices Rise on Monday

US natural gas prices fell below $2.90/MMBtu, the lowest in one week, as recovering domestic production and stronger-than-expected storage additions outweighed support from rising LNG exports. According to the EIA, inventories increased by 80 billion cubic feet last week, exceeding forecasts for a 75 bcf build and accelerating from the previous week’s 77 bcf injection. Total stocks reached 3.724 trillion cubic feet, 3.8% below year-earlier levels but 1% above the five-year average. Meanwhile, output across the Lower 48 states recovered to approximately 113.3 billion cubic feet per day, improving domestic supply availability. Forecasts for milder-than-normal temperatures through November 13 are also expected to limit heating demand, adding further downward pressure on prices. However, stronger LNG exports provide some support, with average flows to the nine major US export terminals rising to 18.5 bcfd in October, compared with 17.9 bcfd in September.

US natural gas prices rose above $3.0 per MMBtu, supported by rising LNG export activity. On a daily basis, feedgas deliveries to the nine major LNG export plants rose to an average of around 19.1 bcfd over the past two weeks, while flows so far this month stood at 18.3 bcfd, up from 17.9 bcfd in September. Growing demand for US LNG from European and Asian buyers also supported prices, as the two regions race to secure supplies ahead of winter. However, gains were limited by forecasts for above-normal temperatures across much of the eastern two-thirds of the country, which could limit heating demand in the coming weeks. On the supply side, Lower 48 output averaged 112.1 bcfd so far in October, down from record highs of 113.3 bcfd in August and September, although daily production has recovered to around 113.3 bcfd over the past week. Meanwhile, analysts forecast that US gas storage fell to 0.7% above the five-year average in the week ended October 23, down from 1% the previous week.

US natural gas prices fell to $2.58 per MMBtu on Tuesday, having touched a two-year low in the previous session, as forecasts for warmer weather continued to weigh on demand expectations. Above-normal temperatures are expected across the eastern two-thirds of the country through November 9, according to EBW Analytics Group. This outlook has reinforced expectations that a Super El Niño would bring warmer weather this winter and reduce gas demand at a time when it is usually at its highest. The rise in production also added pressure to the market, with output across the Lower 48 states averaging 113.3 bcfd over the past week. However, monthly production so far this month stood at 111.9 bcfd, remaining below the record level of 113.3 bcfd recorded in both August and September. Meanwhile, average feedgas flows to the nine major LNG export terminals rose to 18.3 bcfd in October to date, up from 17.9 bcfd in September, limiting further price declines.