FX.co ★ US Natgas Prices Fall to 2-Week Low

U.S. natural gas futures have dipped below $3.5 per MMBtu, marking a two-week low, primarily due to anticipated weaker demand in the short term and a decline in LNG exports. Forecasts indicate that warmer-than-average weather through the end of May will decrease heating requirements, while the mild temperatures are also likely to reduce the demand for cooling, thereby decreasing overall consumption levels. Moreover, gas flow to LNG export terminals has receded from the record highs seen in April, partly due to seasonal maintenance work. Conversely, the average gas production in the contiguous U.S. states has dropped to 103.6 billion cubic feet per day in May, down from 105.8 billion cubic feet per day in April. Additionally, data from the Energy Information Administration (EIA) revealed an unusually large storage addition last week, attributed to the mild weather which suppressed both heating and cooling needs. Utilities injected 110 billion cubic feet of gas into storage for the week ending May 9, a significant increase compared to the 73 billion cubic feet added during the same period last year, and well above the five-year average of 83 billion cubic feet for this time of year.