U.S. natural gas futures have declined by over 3%, settling at approximately $3.25 per million British thermal units (MMBtu). This drop follows the latest report from the Energy Information Administration (EIA), which revealed a more substantial storage increase than anticipated. Last week, gas inventories grew by 120 billion cubic feet, surpassing the forecasted 115 billion cubic feet and significantly exceeding both last year’s increase of 78 billion cubic feet and the five-year average of 87 billion cubic feet. The rise in storage is largely attributed to mild weather conditions, which have reduced the need for heating and cooling, thus curbing demand.
Currently, the total gas in storage is at 2.375 trillion cubic feet. This level is 12.3% below the figures from the previous year but stands 3.9% above the five-year average. Furthermore, liquefied natural gas (LNG) export volumes have decreased to 15.1 billion cubic feet per day (bcfd) in May, down from April's 16.0 bcfd. This decline is due to maintenance work at facilities including Cameron LNG, Cheniere’s Corpus Christi site, and temporary disruptions at Freeport LNG.
Domestic production has also seen a reduction, now at 103.9 bcfd, a decrease from April's record 105.8 bcfd, partly as a result of maintenance activities on crucial pipelines such as Kinder Morgan’s Permian Highway. Looking forward, there is an anticipation of increased demand driven by heat in mid-to-late June, which could potentially bolster prices.
