US natural gas futures edged lower on Monday amid the slowdown in power burn demand and LNG export feedgas flows, alongside bearish near-term weather forecasts.
The front-month Henry Hub contract and the continuous futures contract both were down 1.65%, to trade at $2.863 per million British thermal units.
Total natural demand dropped by 5 billion cubic feet per day last week to 106 Bcf/d, largely due to the drop in power sector demand, as temperatures began to moderate across the Midwest and East Coast, according to NRG Energy.
Gary Cunningham of Tradition Energy also noted that clearing the heat and smoke across the Northeast should lead to a sharp rise in solar output, further weighing on gas-fired power burn nationwide. He also noted that "overall the grid should be in much better shape to start the week," following weeks of congestion.
Weather forecasts have continued to turn bearish, with the Northeast and Northwestern parts of the country, along with Alaska, expected to see below-normal temperatures from July 27 through August 2, according to the National Weather Service.
At the same time, LNG export feedgas flows remained under pressure, forecast at 17.96 Bcf on Monday, compared with the 30-day moving average of 18.51 Bcf, according to the Bloomberg LNG Feedgas Model.
This was largely due to the major Freeport LNG Facility entering into maintenance, which is expected to last until late August.
Meanwhile, natural gas output remained flat, at 107.7 Bcf/d, according to NRG Energy, while the average for this month so far was 110.2 Bcf/d, Trading Economics said, adding more downward pressure on the commodity.