US natural gas prices slipped to about $2.74/MMBtu on Tuesday, pulling back after a two-day rally as robust production, comfortable storage levels, and softer LNG feedgas demand pressured the market. Output in the Lower 48 has averaged a record 111.5 bcfd so far in August, up from 110.7 bcfd in July, adding to supply at a time when gas inventories stand 6.7% above their five-year seasonal average.
At the same time, gas flows to the nine major US LNG export facilities have eased to 17.1 bcfd so far this month, down slightly from 17.2 bcfd in July, leaving more gas available for the domestic market. Data also showed that Cheniere Energy’s Corpus Christi LNG plant in Texas continued to take in reduced volumes of natural gas on Monday, signaling that maintenance work remains underway.
On the demand side, weather forecasts have turned marginally cooler than previously expected. Even so, above-normal temperatures are still projected across Texas and the Southwest through September 7, which should keep cooling demand relatively strong.
