US Natgas Prices Drop Over 1%

US natural gas prices fell more than 1% to $2.85/MMBtu on Friday, erasing the previous session’s gains as weather forecasts turned cooler. Above-average temperatures are now expected to cover a smaller area of the South and Southeast from September 22 to October 1, potentially curbing gas demand from power generators for air conditioning. Prices had risen on Thursday after the EIA reported a below-average storage build for the week ended September 11, narrowing the inventory surplus over the five-year average to 118 Bcf from 148 Bcf a week earlier, as late-season heat boosted power-sector demand. Strong production also continued to weigh on the market, with Lower 48 production averaging 113.1 bcfd in September, above August’s record monthly average of 112.2 bcfd. At the same time, average flows to the nine major US LNG export facilities were expected to fall to a three-week low of 17.5 bcfd, primarily due to maintenance at Cameron LNG in Louisiana.

US natural gas prices rose to $2.92 per million British thermal units after EIA data showed that high temperatures and strong air-conditioning demand limited the amount of gas added to storage last week. Energy firms injected 44 billion cubic feet into storage in the week ended September 11, below the 87 bcf increase a year earlier and the five-year average of 74 bcf. Total inventories reached 3.298 trillion cubic feet, around 3.6% below last year’s level but 3.7% above the five-year average. Meanwhile, forecasts indicate warmer-than-normal weather could persist through October 2, supporting gas demand from power generators. Average flows to the nine major US LNG export facilities were expected to fall to a three-week low of 17.5 bcfd due mainly to maintenance at Cameron LNG in Louisiana. On the supply side, Lower 48 production averaged 113.1 bcfd in September, above August’s record monthly average of 112.2 bcfd.

US natural gas prices were above $2.90 per million British thermal units, reaching their highest level since September 4, driven by lower production and forecasts for continued warm weather. Average output across the Lower 48 states was expected to fall to a two-month low of 108.4 bcfd on Tuesday. Hotter-than-normal conditions have also increased gas consumption for power generation, with analysts estimating that storage was 3.6% above the five-year average in the week ending September 11, down from 4.8% the previous week. Despite record production and mild spring weather keeping inventories above the five-year average since March, the surplus has continued to narrow. Meteorologists expect temperatures to remain mostly above normal through September 30, likely sustaining elevated demand for air conditioning and gas-fired power generation. Meanwhile, average flows to the nine major US LNG export facilities rose to 18.3 bcfd so far in September, up from 17.2 bcfd in August.