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US Natural Gas Update: Futures Decline Nearly 3% Amid Strong Output, Bearish Weather Forecasts

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US natural gas futures slid on Wednesday, retreating from an eight-week high amid strong output and bearish near-term weather forecasts.

The front-month Henry Hub contract and the continuous contract both declined 2.54% to $2.842 per million British thermal units.

Total dry gas output stood at 109.5 billion cubic feet per day, dipping modestly by 0.3 Bcf/d, but still 1.6 Bcf/d above year-ago levels, according to NRG Energy. Meanwhile, demand was projected to strengthen by 1.8 Bcf/d day over day, to 111.0 Bcf/d.

Weather momentum, however, continued to ease, with northern parts of the country expected to see near- or below-normal temperatures from September 16 through September 22, according to the National Weather Service.

According to Pinebrook Energy Advisors, while the new stretch of milder weather is helping ease power generation demand, the relatively light recent storage builds have held the market "from fully dismissing tightening fundamentals."

Meanwhile, LNG export feedgas has mounted a complete recovery, projected at 19.77 Bcf/d on Wednesday, which was significantly above the 30-day moving average for this period at 18.47 Bcf/d, according to the Bloomberg LNG Feedgas Model.

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