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US Natural Gas Update: Futures Slide Amid Drop in Domestic Demand, Steady Output

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US natural gas futures were down on Tuesday amid a steep drop in domestic demand, while gas production continues to remain steady.

Both the front-month Henry Hub contract and the continuous contract were down by 2.65% to $2.833 per million British thermal units.

Supply remains above demand, averaging 107.2 billion cubic feet per day, while demand softened to 98.7 Bcf/d from 105 Bcf/d last week, according to NRG Energy.

At the same time, LNG export feedgas flows are averaging about 17 Bcf/d, compared with the 30-day moving average of 18.87 Bcf/d. This is due to scheduled maintenance across several LNG export facilities, which is expected to last a few more weeks.

However, weather forecasts have turned bullish, with almost the entire country expected to see above-normal temperatures from May 19 to May 25, according to the National Weather Service.

This is expected to create meaningful early-season cooling demand, according to Pinebrook Energy Advisors, which should result in "higher natural gas burn for power generation and tighten the fundamental balance."

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