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US Natural Gas Update: Prices Fall on Strong Output, Shifting Weather Forecasts

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US natural gas futures fell on Monday as robust domestic production and comfortable inventory levels weighed on prices, while cooler weather forecasts for the Northeast and Midwest reduced near-term demand expectations.

The front-month Henry Hub contract and the continuous contract each fell 1.46% to $2.693 per million British thermal units.

Weather forecasts also pressured the market, with mixed model changes adding uncertainty to the broader US outlook.

NatGasWeather.com said it expects natural gas demand to remain high over the next seven days, while the 15-day pattern remains quite hot overall, with most of the country forecast to be warmer than normal, particularly across the southern two-thirds.

The population-weighted average temperature forecast for the Lower 48 fell by 8.2 degrees Fahrenheit, according to Aegis Hedging, citing Criterion Research data.

Strong production is also adding to downward pressure on prices. Average output in the Lower 48 has reached 111.6 billion cubic feet per day so far in August, surpassing July's monthly record of 110.7 Bcf/d, Trading Economics said.

Demand, meanwhile, rebounded to 117.7 Bcf/d, with power burn rising 1.6 Bcf/d to a two-week high of 50.3 Bcf/d. Exports to Mexico reached 8.5 Bcf/d, according to Gelber & Associates.

Average gas flows to the nine major US LNG export facilities rose to 17.3 Bcf/d in August from 17.2 Bcf/d in July, Trading Economics said.

Aegis Hedging noted that Freeport LNG continues to operate at partial rates, with three-train operations expected to resume later this month.

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