Natural Gas Prices Drop as Cooler Weather Forecasted
U.S. natural gas prices fell slightly on Tuesday due to cooler weather forecasts, which are expected to reduce demand from electricity providers for air-conditioning in the Northeast over the weekend. Despite this decline, losses were limited by rising European natural gas prices driven by fears of a prolonged closure of the Strait of Hormuz amid escalating U.S.-Iran tensions. Production and consumption data showed continued growth: Lower-48 state dry gas production reached 114.0 bcf/day (+5.5% y/y), while demand stood at 79.7 bcf/day (+14.7% y/y). LNG net flows to U.S. export terminals also increased by 12.0% week-over-week, reaching 19.5 bcf/day. The EIA raised its 2027 production estimate and projected a record-high storage level of 3,985 bcf at the end of October—5% above the five-year average—which is seen as bearish for prices.
Topics: energy market natural gas weather impact