US natural gas futures fall as LNG exports decline

US natural gas futures fell for a fifth consecutive day on Wednesday, as pipeline and liquefied natural gas (LNG) exports declined and concerns rose over how measures to slow the spread of coronavirus will continue cutting demand.

"Lost demand due to coronavirus-related closures and recent maintenance on pipelines that supply LNG terminals and exports to Mexico continue to leave excess gas in the market," said Daniel Myers, market analyst at Gelber & Associates in Houston.

In addition, some traders noted gas was down with oil futures. US crude settled at its lowest since Feb. 2002 on Wednesday.

Front-month gas futures for May delivery on the New York Mercantile Exchange fell 5.2 cents, or 3.2%, to settle at $1.598 per million British thermal units.

That marked the contract's lowest close since April 2 when it settled at $1.552 per mmBtu, its lowest since August 1995. It also put the front-month down for a fifth straight day for the first time since October, when the contract was about 14% higher.

Even before the coronavirus started to cut global economic growth and energy demand, gas was trading near its lowest in years as record production and months of mild winter weather allowed utilities to leave more fuel in storage, making shortages and price spikes unlikely.

Looking ahead, however, gas futures for the balance of 2020 and calendar 2021 were trading much higher than the front-month on expectations demand will jump in coming months, as the economy snaps back once governments loosen travel and work restrictions after slowing the spread of coronavirus.

The premium of futures for June over May rose to its highest since 2008 when the contracts started trading for a fourth day in a row, while calendar 2021 has traded over 2022 for 25 days and over 2025 for 15 days.