US natural gas futures pared steeper losses in after-hours trading on Tuesday but still closed lower as traders refocused on oversupply concerns.
Both the front-month Henry Hub contract and the continuous contract fell 2.61% to $2.834 per million British thermal units.
Tuesday's price drop reversed part of Monday's more than 6% surge that had pushed prices to their highest levels since March. Monday's rally was fueled by forecasts for stronger cooling demand and expectations of tighter balances following the restart of a Texas LNG plant as well as continued support from the conflict in the Middle East. But analysts said the market's attention has shifted back toward ample supply and weakening near-term demand.
"Geopolitics has kept global energy markets jumpy and helped support gas earlier in the week, but follow-through has been elusive with national demand still choppy and supply holding near seasonal highs," Gelber & Associates said in a market note.
It added that with LNG feedgas demand easing due to seasonal maintenance and domestic production remaining resilient, "the path of least resistance has shifted lower again as traders look past headline risk and back toward storage and the shoulder season reset."
US natural gas demand fell from about 105 billion cubic feet per day earlier in the week to 98.7 Bcf/d on Tuesday, according to NRG Energy.
Both heating and cooling demand may pick up in the near term. NatGasWeather said moderate-to-low demand is expected over the next five to six days as cooler-than-normal systems move across the Midwest and Northeast, bringing temperatures into the 30s and 40s Fahrenheit. While the West and Southwest are expected to see highs in the 90s and above 100 degrees Fahrenheit.
Meanwhile, production remained steady. NRG Energy said dry gas output averaged roughly 107.2 Bcf/d over the past week with only modest fluctuations. The US Energy Information Administration on Tuesday raised its 2026 production forecast to 110.61 Bcf/d from 109.60 Bcf/d estimated in April.
LNG feedgas flows averaged around 17 Bcf/d, but export demand is expected to soften in the coming weeks due to maintenance at Cameron LNG and lower flows to Corpus Christi and Freeport. Freeport LNG has also announced unplanned maintenance for May.
Traders are also monitoring the gradual ramp-up of Golden Pass LNG and the expected startup of Corpus Christi Stage III Train 6 following regulatory approval.