FX.co ★ US Natgas Market Remains Under Pressure

U.S. natural gas futures have dipped below $3 per MMBtu, nearing their lowest point since November 2014. This decline is influenced by almost record-breaking production levels, high storage reserves, and forecasts predicting milder weather conditions. In August, production in the Lower 48 states averaged 108.4 billion cubic feet per day (bcfd), increasing from the previous record of 107.9 bcfd in July. Although this summer has been hotter than usual, the substantial supply has facilitated above-average storage injections, resulting in inventory levels approximately 6% higher than the seasonal norms, with further growth anticipated. Meteorologists predict continued above-normal temperatures until August 26, albeit with less intensity than earlier forecasts, leading to reduced demand. Liquefied natural gas (LNG) exports are rising as well, with average feedgas flows to U.S. export facilities at 16.2 bcfd this month, up from 15.5 bcfd in July. Daily flows are expected to reach 17.0 bcfd, approaching April’s record of 17.3 bcfd, propelled by record deliveries to Venture Global’s new Plaquemines facility in Louisiana.