US natural gas drops over 2% to $2.66 as storage build beats forecasts

U.S. natural gas futures fell about 2.2% to around $2.66-$2.672 per mmBtu, staying near a three-month low as a larger-than-expected storage build, record Lower 48 production and cooler near-term weather forecasts weighed on prices. The EIA said utilities injected 36 bcf into storage in the week ended August 7, above forecasts for 31 bcf and the five-year average increase of 33 bcf. Production averaged a record 111.3 bcfd in August so far, up from 110.7 bcfd in July. LNG-related signals were mixed: one report said flows to the nine major U.S. LNG export facilities edged down to 17.1 bcfd in August from 17.2 bcfd in July, while another said feedgas flows were recovering and partly offset weaker weather-driven demand. EBW Analytics' Eli Rubin said sustained stronger LNG demand could help support prices, but higher supply in coming weeks and cooler weather may mark a seasonal low before an autumn recovery.

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