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US Natural Gas Update: Futures Slide Over 3% Amid Late Month Rainstorm Forecasts

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US natural gas futures declined sharply on Wednesday as forecasts of severe rainstorms weighed on prices, despite a more supportive late-month demand outlook.

The front-month Henry Hub contract and the continuous contract were both down 3.33% to $3.131 per million British thermal units.

Nearly two-thirds of the country is expected to see above-normal precipitation from June 24 to June 30, according to the National Weather Service. Such conditions are usually expected to weigh on natural gas-fired power generation, leading to a bearish turn in the market.

According to Gary Cunningham of Traditional Energy, the "storm system forming in the Western Gulf" could even restrict LNG shipments over the coming week, noting that the National Hurricane Center now puts the likelihood of formation at "60% and climbing rapidly."

Meanwhile, on the bullish front, natural gas output is expected to decline to 106.3 billion cubic feet per day, 1 Bcf/d below the month-to-date average, according to NRG Energy.

Natural gas feedgas flows are expected to recover to 19.49 Bcf on Wednesday, compared to the 30-day moving average of 17.95 Bcf, according to the Bloomberg LNG Feedgas Model, as spring maintenance at major facilities comes to an end.

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