US Natgas Prices Drop to Over 2-Week Low

US natural gas prices fell to $3.03 per million British thermal units, extending losses to reach a more than two-week low as mild weather persisted. Forecasts call for mild temperatures through late October, limiting both heating and cooling demand. At the same time, El Niño-related expectations continue to weigh on the winter demand outlook. These weather factors outweighed support from a rise in LNG export activity and lower production. Average gas flows to the nine major US LNG export terminals rose to 18.1 bcfd so far in October, up from 17.9 bcfd in September. On the supply side, gas output in the Lower 48 states averaged 111.3 bcfd so far this month, down from record highs of 113.3 bcfd in August and September. In addition, the storage surplus continued to shrink, with inventories as of October 9 standing 3.9% below year-ago levels and just 1.3% above the five-year average.

US natural gas prices dropped more than 3% to $3.11 per million British thermal units on Friday, their lowest level in over a week. Prices were down around 3% for the week, following a 6% gain the previous week. Average production across the Lower 48 states reached 110.8 billion cubic feet per day (bcfd) in October, below August and September records of 113.3 bcfd. Recent disruptions linked to Hurricane Isaias, Gulf of Mexico shutdowns and pipeline problems contributed to the decline. LSEG expects demand, including exports, to rise from 103.87 bcfd this week to 106.8 bcfd over the following two weeks as colder weather arrives. Meanwhile, average feedgas deliveries to major US LNG export terminals eased to 17.6 bcfd in October from 17.9 bcfd in September. However, daily flows were on track to reach a five-month high of 18.9 bcfd on Friday, supported by stronger deliveries to Sabine Pass and Golden Pass.

US natural gas prices were above $3.20 per million British thermal units, approaching a three-week high after government data showed a smaller-than-expected increase in storage. The EIA reported an injection of 67 billion cubic feet for the week ending October 9, below forecasts of 76 bcf and the five-year average of 90 bcf. Total inventories reached 3.567 trillion cubic feet, leaving stocks 3.9% below year-earlier levels but 1.3% above the seasonal norm. Supply constraints have also supported prices, with Lower 48 production averaging 110.8 billion cubic feet per day so far in October, down from record levels of 113.3 bcfd in August and September. Hurricane-related shutdowns, force majeure events and pipeline disruptions contributed to the decline. However, forecasts for milder-than-usual weather through October 29 could restrain heating and cooling demand. Meanwhile, average feedgas deliveries to major US LNG export terminals slipped to 17.5 bcfd from 17.9 bcfd in September.