US Natural Gas Prices Rise

US natural gas prices rose to around $2.89/MMBtu, driven by tightening production and a slightly colder weather outlook. Lower production over the weekend, particularly in the Appalachia shale region, offered some support and may indicate that producers are adjusting output to the persistently weak price environment. Slightly cooler weather forecasts also provided a modest boost to expectations for heating and power demand as the winter season begins. However, the upside remains constrained by expectations of warmer-than-average conditions across most of the country through November 16, limiting the prospect of a significant increase in consumption. Lower gas flows to LNG export terminals added another headwind, as reduced overseas shipments left more supply available to the domestic market.

US natural gas prices steadied around $2.90/MMBtu, remaining near a one-week low as persistently mild weather and a recovery in domestic production weighed on the market. Meteorologists forecast that temperatures across much of the country would remain mostly warmer than normal during the first half of November, likely keeping heating demand subdued. At the same time, output across the Lower 48 states recovered to an average of around 113.3 bcfd over the past week, improving domestic supply availability. These factors are outweighing support from strong LNG exports and tightening storage levels. Average feedgas flows to the nine major US LNG export terminals rose to 18.5 bcfd in October, up from 17.9 bcfd in September. Meanwhile, the EIA reported a larger-than-expected increase in inventories for the week ended October 23, bringing total stocks to roughly 1% above the five-year average and 3.8% below year-ago levels.

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.