FX.co ★ US Natgas Prices Fall on Monday

U.S. natural gas futures experienced a sharp decline of over 5%, settling at $3.5 per MMBtu on Monday. This drop follows a previous session where prices surged by 6%. The decline is primarily attributed to increased production and projections of milder weather conditions. While temperatures across the Lower 48 states are anticipated to remain above the average until at least July 12, meteorologists predict that the intense heat experienced last week is unlikely to return. On the supply front, production averaged 105.6 billion cubic feet per day (bcfd) in June, slightly exceeding May's 105.2 bcfd but still trailing March's record high of 106.3 bcfd, with most spring maintenance having concluded. In terms of exports, gas flows to the eight major U.S. LNG export facilities averaged 14.2 bcfd in June. This figure is below May's 15 bcfd and April's peak of 16 bcfd, but has seen slight improvements as certain plants have resumed operations. Analysts anticipate a decrease in storage injections this week following ten consecutive weeks of above-average builds, as power generators increased their gas consumption during the recent heatwave to accommodate heightened air conditioning demand.