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US Natural Gas Update: Futures Slide Amid Strong Output, Weak Demand and LNG Feedgas Flows

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US natural gas futures were down on Tuesday, reaching their lowest levels in three months, amid strong output alongside weak demand and LNG feedgas flows, which continued to weigh on prices.

Both the Henry Hub front-month futures and the continuous contract were down 2.28% to $2.704 per million British thermal units.

Total dry gas production is expected to decline by just 0.2 billion cubic feet per day this week, while demand is down by 1.3 Bcf/d, at 112.3 Bcf/d, primarily driven by a drop in power burn demand, according to NRG Energy.

LNG export feed gas flows were expected to dip to 17.0 Bcf/d, compared to the 30-day moving average of 18.25 Bcf/d, according to the Bloomberg LNG Feedgas Model. This is primarily due to the Freeport LNG facility in Texas entering into scheduled maintenance, which is set to last until late August.

Meanwhile, weather forecasts continued to point towards above-normal temperatures across most of the country from August 04 through August 10, according to the National Weather Service, which is expected to keep spacing cooling demand and gas-fired power burn elevated.

According to the Energy Buyer's Guide, "strong summer demand remains in place, particularly across Texas and the West." However, they note that the market is showing little concern regarding this dynamic.

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