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US Natural Gas Update: Futures Ease on Low Cooling, LNG Demand

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US natural gas futures edged slightly lower by midday Tuesday as weather forecasts remained steady and LNG feedgas demand eased further.

Both the front-month Henry Hub contract and the continuous contract edged down by 0.60% to $3.36 per million British thermal units.

Weather revisions were limited overnight, with forecasts still pointing to temperatures gradually climbing toward about 75 degrees Fahrenheit by mid-June, limiting near-term weather-driven upside, Aegis Hedging said.

NatGasWeather said national demand will remain light over the next seven days as parts of Texas and the southern US cool modestly. Northern regions are expected to see comfortable conditions.

The firm added that model data continues to show a hotter-than-normal pattern emerging in the second week of June, expanding across much of the US, which could support stronger national demand.

On the supply side, Lower 48 gas production averaged 109.4 billion cubic feet per day in May, slightly below April's 109.8 Bcf/d, according to Trading Economics.

NRG said total US gas demand is forecast to fall by 1.2 Bcf/d on Tuesday, driven mainly by a 1.5 Bcf/d drop in power burn. Industrial demand is expected to rise just 0.1 Bcf/d, while residential and commercial demand is projected to increase 0.3 Bcf/d.

LNG feedgas flows also weakened, dropping nearly 450 MMcf/d from the prior day to 17.1 Bcf/d Tuesday morning. The decline was driven by reduced deliveries to Sabine Pass, where feeder pipeline outages continued to restrict intake, Aegis said.

NRG said its data placed LNG feedgas flows at 16.2 Bcf/d and said they are expected to fall for a fourth straight day, down another 0.1 Bcf/d. It added that LNG feedgas continues to ease as vessel arrivals slow, with only one ship currently headed to China, down from as many as five last week.

"It looks like we are slowly coming back to full load at the LNG export terminals, but Golden Pass is still struggling to run consistently so that adds a bit of downside risk to export demands," Gary Cunningham of Tradition Energy said in a note on Tuesday.

He added that strong pipeline flows into Mexico and the upcoming start of Costa Azul later this year continue to support a bullish longer-term export outlook.

He said these factors support late-2026 pricing and raise concerns about injection pace.

On Mexico-linked demand, Aegis said Amigo LNG is advancing plans for a proposed export facility in Guaymas, Sonora, that would add just over 1 Bcf/d of LNG export capacity, supplied by US gas from the Permian Basin, providing additional longer-term demand support.

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