FINWIRES · TerminalLIVE
FINWIRES

US Natural Gas Update: Futures Hit 2-Month Low as Production Strength, Mild Weather Weigh on Prices

By

US natural gas futures prices hit a two-month low in midday trade on Tuesday on robust production and weakening demand before paring losses by midday.

The front-month Henry Hub contract and the continuous contract each declined 0.17% to $2.89 per million British thermal units.

In earlier trade, the August Henry Hub price hit what Trading Economics said was a two-month low of $2.85/MMBtu before trading back up to nearer the previous close.

NRG Energy said weather forecasts continued to point to moderate temperatures across major demand regions, limiting near-term consumption growth and weighing on prices.

US natural gas demand was projected to increase only modestly on Tuesday, with total demand expected to rise by 0.6 billion cubic feet per day, NRG said.

The power sector was expected to drive the increase, with demand forecast to rise by 0.4 Bcf/d to 49.2 Bcf/d on what is forecast to be a short-lived bout of hot weather in the eastern US.

Residential and commercial demand was projected to increase by 0.3 Bcf/d, while industrial demand was expected to remain unchanged at 21.8 Bcf/d, according to NRG.

LNG export feedgas demand was forecast to edge down 0.1 Bcf/d to 16.9 Bcf/d, NRG said. Trading Economics attributed the decline in flows to maintenance at the Freeport LNG plant, which is expected to be completed late next month.

NRG said US natural gas production had fallen below 108 Bcf/d after reaching 108.5 Bcf/d over the weekend.

Lower 48 output averaged a robust 110.2 Bcf/d so far in July, up slightly from 110.0 Bcf/d in June, Trading Economics said.

Market estimates indicated that US gas inventories were expected to remain about 6.6% above the five-year average for the week ended July 10, reflecting comfortable supply levels, Trading Economics said.

Related Articles

Commodities

Grasim Industries' Aditya Birla to Buy Sprng Energy from Shell in $1.8 Billion Deal

Grasim Industries' (BOM:500300,NSE:GRASIM) Aditya Birla Renewables signed a definitive agreement to acquire Sprng Energy from Shell plc for an enterprise value of $1.8 billion.The acquisition adds a 5-GWp contracted capacity to Aditya's renewables business and is one of the biggest deals in the Indian market, according to a statement on Monday.The deal, which is being funded through debt and equity from Grasim and BlackRock's Global Infrastructure Partners, is expected to complete within the year, subject to certain conditions.

BOM:500300NSE:GRASIM
Commodities

US Natural Gas Update: Futures Fall to 2-Month Low on Strong Supply, Weaker LNG Flows

US natural gas futures fell to a two-month low on Monday as stronger domestic production and lower liquefied natural gas export flows weighed on prices, although hotter-than-expected weather forecasts helped limit the decline.The front-month Henry Hub contract, along with the continuous contract, settled down 1.29% at $2.902 per million British thermal units.According to Barchart, rising US natural gas output and reduced LNG exports pressured prices. Natural gas production in the Permian Basin climbed above 23 billion cubic feet per day over the weekend, the highest level in two months.At the same time, gas flows to US LNG export terminals fell to 17.5 Bcf/d on Monday, the lowest level in a month, leaving more gas available for the domestic market.The decline was tempered by forecasts for hotter weather, which could increase demand from power generators to meet higher air-conditioning loads.The Commodity Weather Group said on Monday that weather models had shifted toward warmer conditions, with above-average temperatures expected across much of the northern US through July 17.Citing BNEF data, Barchart said Lower 48 dry gas production reached a robust 113.2 Bcf/d on Monday, up 5.5% from a year earlier and well above the US Energy Information Administration's projected record annual average of 111.1 Bcf/d for 2026. Lower 48 gas demand was estimated at 77.4 Bcf/d, up 4.2% year over year.Separately, Celsius Energy estimated power-sector gas consumption at 42.5 Bcf/d on July 12, or 3.4 Bcf/d below the level recorded a year earlier.BNEF estimated net LNG feedgas deliveries to US export terminals at 17.5 Bcf/d on Monday, down 5.8% from the previous week.Meanwhile, Natural Gas Intelligence is forecasting a 44 billion cubic feet injection into US natural gas storage for the week ended July 10.The projected build compares with a 47 Bcf injection during the same week last year and the five-year average increase of 45 Bcf, according to EIA data.A 44 Bcf storage build would follow the previous week's 61 Bcf injection, lifting total inventories to an estimated 3.027 trillion cubic feet. As of July 3, working gas in storage stood at 2.983 Tcf, 15 bcf below year-ago levels but 185 bcf above the five-year average, according to the EIA.

Commodities

PJM Issues Hot Weather Alert for July 14-17

PJM Interconnection expects electricity demand to peak at 162,699 megawatts this week and has issued a Hot Weather Alert covering July 14-17, the regional transmission operator said Monday.PJM forecasts peak demand of 151,105 MW on Tuesday; 162,699 MW on Wednesday; 160,893 MW on Thursday, and 154,942 MW on Friday.The operator recently recorded a preliminary all-time peak load of 168,158 MW on July 2, exceeding the previous record of 165,563 MW set on Aug. 2, 2006, it said.PJM said operators monitor the grid around the clock, balancing electricity supply and demand while preparing for multiple scenarios involving extreme weather, emergency conditions and equipment failures.The control room team continuously adjusts power output as demand changes, prevents transmission facilities from becoming overloaded and responds to unusual operating conditions to maintain reliable electricity service, PJM said.The alert covers PJM's entire service territory as temperatures climb above 90 degrees Fahrenheit. PJM said the measure helps transmission and generation operators prepare for higher electricity demand and does not require any action from customers.