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US Natural Gas Update: Futures Slide Amid Abundant Supplies, Depressed Feedgas Flows

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US natural gas futures slid after abundant supplies and depressed LNG feedgas flows capped the commodity's near-term upside.

The front-month Henry Hub contract and the continuous contract each dropped 3.96% to $2.671 per million British thermal units.

This comes amid US dry gas output touching its highest levels since July 31, at 109.4 billion cubic feet per day, while continuing to remain elevated throughout this week, averaging 108.7 Bcf/d, according to NRG Energy, weighing on prices this week.

Meanwhile, LNG export feedgas flows remained depressed, averaging 16.9 Bcf/d this month, nearly 3.0 Bcf/d below levels observed in April. This is largely the result of the Freeport LNG facility in Texas entering into scheduled maintenance on July 10, which is set to last until early August.

Weather forecasts, however, remained bullish, with above-normal temperatures expected to blanket most of the country from August 11 to August 17, according to the National Weather Service, keeping space cooling demand and gas-fired power generation elevated.

According to the Energy Buyer's Guide, "the hottest weather on a population-weighted basis is anticipated late this week and over the weekend," which is expected to support prices over the coming days.

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