FX.co ★ US Natgas Prices Edge Up Slightly

US natural gas prices climbed above $2.90/MMBtu, supported by tightening supply and a slightly colder weather outlook. A drop in output over the weekend, particularly in the Appalachia shale region, suggests producers may be curbing production in response to persistently weak prices. Cooler forecasts have also lent some support to expectations for heating and power demand as the winter season gets underway. Nonetheless, the upside remains limited by projections for warmer-than-average temperatures across most of the country through November 16, which cap the potential for a strong increase in consumption. In addition, lower gas flows to LNG export facilities have created another drag on prices, as reduced overseas shipments leave more supply in the domestic market.