FINWIRES · TerminalLIVE
FINWIRES

US Natural Gas Update: Futures Soar Over 4% Amid Falling Output, Weak Storage Build

By

US natural gas futures were up on Monday as domestic output continued to decline, with major gas producers scaling back production amid weak spot prices.

The front-month Henry Hub contract and the continuous futures contract both rose 4.1% to $2.87 per million British thermal units.

This comes amid major players such as EQT (EQT) cutting back production amid lower spot prices over the past few weeks, according to TradingEconomics.

At the same time, the US Energy Information Administration's Weekly Gas Storage Report showed a net injection of 63 billion cubic feet into storage for the week ended May 1, which fell short of forecasts of 72 Bcf, according to data compiled by Investing.com, creating additional support for prices.

Gas deliveries to LNG feedgas facilities are expected at 17.63 Bcf for Monday, according to Bloomberg's LNG Feedgas Model, compared to the 30-day moving average of 18.95 Bcf. This has been attributed to seasonal maintenance across several Gulf Coast terminals.

Weather conditions are expected to be warmer-than-normal across the Western US, and colder-than-normal across the East Coast throughout this week, with no major impact on natural gas demand dynamics during this period, according to NRG Energy.

However, the whole of the US is expected to see above-normal temperatures from May 18 to May 24, which could add to the cooling demand across certain regions, according to the National Weather Service.

Price: $56.22, Change: $+0.26, Percent Change: +0.46%

Related Articles

Commodities

Market Chatter: Trump Mulls Temporary Pause on Gas Tax

US President Donald Trump said he intends to suspend the federal gasoline tax temporarily to provide economic relief, an initiative he expects to phase out once fuel prices decline, CBS reported on Monday."I think it's a great idea," Trump reportedly told CBS over a phone interview. "We're going to take off the gas tax for a period of time, and when gas goes down, we'll let it phase back in."Trump's proposal to suspend the excise taxes, 18.4 cents/gal on gas and 24.4 cents/gal on diesel, is aimed at reducing the costs for consumers at the pump. However, it requires an act of Congress and is expected to cost the US government about half a billion dollars a week.In response to' request for comment, the White House referred to the President's remarks made earlier in the day.Gas prices have soared by over 50% since the outbreak of the Middle East conflict on Feb. 28, hitting a high of $4.52 per gallon on Sunday, the report said, citing American Automobile Association data.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Commodities

Natural Gas Faces Oversupply, Oil Balances Geopolitical Risk, EBW Analytics Says

Natural gas markets were rangebound Monday as weather shifts, supply trends, and geopolitical risks continued to offset longer-term fundamental pressures, EBW Analytics said in a Monday note.US natural gas futures briefly tested resistance near $2.883/MMBtu before slipping into the high-$2.60s last week. Prices later stabilized following a bullish Energy Information Administration storage report.However, EBW said weakening LNG feedgas demand and rising domestic production continue to pressure the market, with July-December contracts showing significantly more weakness than the front month.Weather forecasts added 12 cooling degree days to the May outlook, which could lift near-term sentiment. Still, EBW cautioned that it is too early for a sustained pre-summer rally. Late-May demand erosion could drive unusually large storage injections, potentially pushing inventories more than 200 billion cubic feet above five-year averages.LNG feedgas has fallen about 2.5 Bcf/d from April highs due to maintenance at major export facilities, including Cameron LNG and Corpus Christi, along with softer flows at Sabine Pass. At the same time, production has rebounded across the Marcellus and Permian, reinforcing expectations for stronger storage builds into early summer.EBW noted that heating demand is set to fall sharply over the next two weeks, increasing the risk of triple-digit weekly injections into late May and June. However, heavy speculative short positions leave the market vulnerable to upside driven by hotter weather.Despite demand concerns, global oil balances remain tight. US gasoline and distillate inventories are at decade seasonal lows, while Chinese imports have fallen by 3-3.5 million barrels per week due to disruptions. EBW warned that shipping delays will continue to push inventory declines for weeks, even under improved conditions in the Strait of Hormuz.Globally, shortages are already appearing in refined products, particularly jet fuel in Europe and supply-constrained regions in Asia. Analysts said markets may reach minimum operating thresholds well before outright depletion, with potential stress conditions emerging as soon as June.US power demand surprised to the upside last week, with stronger loads in New England and the Central Industrial region more than offsetting declines in the South Central, according to market data. Despite the demand strength, power-sector natural gas consumption still edged lower by 0.1 Bcf/d as rising nuclear generation displaced gas-fired output.Regional power prices remained mixed. Day-ahead pricing in PJM West rose to $48.95/MWh, extending the trend of elevated spring shoulder pricing. In contrast, ERCOT North prices fell to $27.17/MWh as weaker loads and stronger wind generation weighed on the market after very low levels the prior week.Nuclear output rose 2.4%, reaching five-year seasonal highs, led by gains in the Southeast and Mid-Atlantic. The increase further limited gas burn for electricity generation while helping stabilize broader power pricing.

Commodities

Asia LNG Imports Rise on Firm Demand, Europe Appetite Softens, Vortexa Says

The global liquefied natural gas market is witnessing divergence in demand, as warmer temperatures in Asia boost demand while narrowing price spreads curb Europe's appetite for spot cargoes, Vortexa strategists said on Monday in a weekly LNG update.Vortexa analysts said aggregate Asian arrivals reached 4.8 million metric tons across 75 cargoes, about 10% above the four-week average, supported by hotter weather and pre-summer inventory building.Thailand recorded 500,000 mt, or seven cargoes, the highest in over a year, as heatwaves drove up demand for gas-fired power. India's receipts reached 600,000 mt, or nine cargoes, a 15% increase above the four-week average.Meanwhile, in Northeast Asia, China imported 1 million mt, or 17 cargoes, about 5% above the four-week average. South Korea's inflows were significantly firm at 1 million mt, or 15 cargoes, 25% higher than the moving average. Japan, by contrast, received 800,000 mt, or 13 cargoes, 10% below its four-week average.Vortexa analysts said the tightening Asian market has widened the price premium of Asian spot LNG over European benchmarks by 45% over the week, with the inter-basin differential averaging $2.2 per million British thermal units.However, the spread between Northwest Europe LNG prices and the Dutch TTF benchmark has reduced the commercial incentive for spot cargoes.Vortexa analysts said the margin no longer fully covers regasification and pipeline transport costs into the Netherlands, while a backwardated TTF curve discourages gas injection into storage.European gas storage levels ended last week at 35%, 12 percentage points below the five-year average. Total LNG deliveries to the EU reached 2.2 million mt, or 38 cargoes, 7% below the four-week average.France's imports fell 30% below average to 300,000 mt amid a planned outage at the 8 million mt-per-annum Montoir terminal. Italy, in contrast, recorded its highest LNG arrivals of the year at 500,000 mt, eight cargoes, supported by summer restocking and firm pricing dynamics in the domestic market.Aggregate EU LNG send-out averaged 4,200 gigawatt-hours per day, about 5% below the four-week average, according to Vortexa data.On the supply side, the first Qatari LNG carrier transited the Strait of Hormuz on May 9, since the outbreak of the conflict in February.The 216,000 cubic meter Al Kharaitiyat completed an outbound passage after loading at Qatar's Ras Laffan terminal on May 1, and is bound for Pakistan.Satellite imagery also showed a vessel loading at Das Island in the UAE, following a previously untracked inbound transit through the strait.US LNG exports remained steady despite scheduled maintenance at the Cameron and Corpus Christi terminals. Total US volumes reached 2.5 million mt, or 36 cargoes, in line with the four-week average.