Cooler weather revisions, high production and a persistent storage surplus kept pressure on prices, while softer LNG export demand and easing U.S.-Iran tensions added to the decline.
U.S. natural gas futures settled below $2.70 per MMBtu, extending recent weakness as cooler weather revisions, strong production and high inventories continued to outweigh summer heat. Nymex gas settled down 3.6% at $2.682 per MMBtu after earlier trading near $2.697, with analysts describing a market that has recently swung between gains and losses as weather-driven demand competes with loose supply conditions. Despite a hot summer across much of the U.S., under-performing power-sector consumption and soft LNG export demand have kept the inventory surplus from shrinking. The market backdrop remains bearish, with U.S. Lower 48 production averaging a record 110.7 billion cubic feet per day in July and storage for the week ended July 31 expected to remain about 6.6% above normal. Broader energy prices also weakened as optimism over possible positive developments in the U.S.-Iran conflict reduced geopolitical support for oil and gas.