US natgas slides on cooler weather and lower mid-June demand

US natural gas futures slipped 2% on Friday on forecasts for milder weather and lower air conditioning demand in mid-June.

The decline came despite an increase in liquefied natural gas (LNG) exports and concerns a tropical storm threatening the Gulf of Mexico could cut output.

Front-month gas futures for July delivery on the New York Mercantile Exchange fell 4.0 cents to settle at $1.782 per million British thermal unit.

For the week, the front-month was down about 2% after rising almost 7% last week.

Tropical Storm Cristobal is expected to sweep across Louisiana's on- and offshore production areas over the weekend.

Refinitiv said gas production in the US Lower 48 states fell to an average of 88.6 billion cubic feet per day (bcfd) so far in June from a one-year low of 89.3 bcfd in May and an all-time monthly high of 95.4 bcfd in November.

With the coming of milder weather in mid-June, Refinitiv projected US demand, including exports, would rise from 81.2 bcfd this week to 82.2 bcfd next week before sliding to 81.6 bcfd in two weeks.

The amount of pipeline gas flowing to US LNG export plants was on track to reach 5.0 bcfd on Friday after dropping to a 13-month low of 3.7 bcfd Monday. That compares with an eight-month low of 6.4 bcfd in May and a monthly record high of 8.7 bcfd in February.

Analysts said US LNG exports dropped in recent months after buyers canceled cargoes due to a collapse in European gas prices.

Major European benchmarks have soared around 60% this week from record lows last week, boosting forwards at the Dutch Title Transfer Facility (TTF) for all months over the US Henry Hub for the first time since late April.