US natural gas prices retreated to $2.76 per MMBtu on Friday, the lowest level in two months, as mild weather forecasts dampened expectations for heating demand. Commodity Weather Group projects above-average temperatures across the Midwest and East through November 5, likely curbing gas consumption. This bearish weather outlook more than offset support from a smaller-than-normal storage build, robust LNG feedgas demand, and reduced output.
According to EIA data, energy companies injected 77 bcf of natural gas into storage in the week ended October 16, below both the 86 bcf added in the same week a year earlier and the five-year average build of 87 bcf. At the same time, average gas flows to the nine major US LNG export facilities rose to 18.2 bcfd in October, up from 17.9 bcfd in September. On the supply side, natural gas production in the Lower 48 states averaged 111.4 bcfd this month, down from the record 113.3 bcfd reached in both August and September.
