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US Natural Gas Update: Futures Slide as Geopolitical Tensions Ease, Weather Forecasts Turn Bearish

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US natural gas futures were down on Monday, hitting their lowest level in nearly three weeks, amid steep pullbacks in global energy markets following the peace agreement between the US and Iran over the weekend.

The front-month Henry Hub contract and the continuous contract both dropped 0.22% to $3.113 per million British thermal units.

In a Truth Social post on Sunday, US President Donald Trump said that the deal with Iran was "now complete," while adding that the Strait of Hormuz would now fully reopen, with the US military blockade in the region coming to an end.

This marked a major de-escalation in the region, diminishing the geopolitical risk premium attached to US natural gas prices over the past few months, as supply constraints had major global buyers clamoring for steady, and largely unaffected, US supplies.

However, Gary Cunningham of Tradition Energy believes the reopening of the Strait of Hormuz had little to do with the pullback in US natural gas prices, as "bearish weather for the next two weeks" has a more outsized impact.

Cunningham also highlighted that some models now project a 20% drop in daily gas-fired power demand compared to Friday, leading to bearish sentiment in the near term.

This comes as output continues to hold above 108 billion cubic feet per day, according to NRG Energy, adding pressure on prices.

On the bullish front, LNG feedgas flows have rebounded, with estimates pointing to 19.35 Bcf/d on Monday, according to the Bloomberg LNG Feedgas Model. This marks a significant improvement from prior weeks and is above the 30-day moving average at 17.81 Bcf/d.

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