NEW YORK: US natural gas futures dropped more than 4% on Monday to a three-week low as output increases and stockpiles remain about 16% over the five-year average. Some analysts said the market was starting to write off the rest of the summer after prices dropped to 5% last week even though this is the hottest time of year and the weather is expected to remain hotter-than-normal through at least early August.

Front-month gas futures fell 7.7 cents, or 4.5%, to settle at $1.641 per million British thermal units, their lowest close since June 26. Refinitiv said production in the Lower 48 US states averaged 88.4 billion cubic feet per day (bcfd) so far in July, up from a 20-month low of 87.0 bcfd in June but still well below the all-time monthly high of 95.4 bcfd in November. Traders noted output was rising as EQT Corp boosted production in Appalachia.

As consumers crank up their air conditioners, Refinitiv forecast US demand, including exports, will rise from 92.5 bcfd this week to 94.1 bcfd next week. That is higher than Refinitiv's outlook on Friday.

Pipeline gas flowing to US LNG export plants averaged 3.3 bcfd (34% utilization) so far in July, down from a 20-month low of 4.1 bcfd in June and a record 8.7 bcfd in February. Utilization was about 90% in 2019.