NEW YORK: US natural gas futures slid about 3% on Monday on rising output and forecasts for less demand next week than previously expected.

The price decline came even though US power generators have burned more gas in recent weeks to produce electricity due to low wind power, and as gas exports from Canada remain lower than normal due to wildfires in Alberta.

The amount of US power generated by wind last week dropped to just 8% of the total versus a recent high of 17% during the week ended April 21, according to federal energy data. That means there will be less of the fuel available to go into storage.

The amount of power generated by gas hit 42% last week, up from a recent low of 37% during the windy week ended April 21.

Front-month gas futures for June delivery on the New York Mercantile Exchange (NYMEX) fell 7.7 cents, or 3.0%, to $2.508 per million British thermal units (mmBtu) at 8:27 a.m. EDT (1227 GMT).

That price decline pushed the front-month out of technically overbought territory for the first time in three days.

But after gas prices rose 14% last week, speculators switched their futures and options positions on the NYMEX and Intercontinental Exchanges to net long from net short for the first time since mid-April, according to the US Commodity Futures Trading Commission’s Commitments of Traders report.

In the spot market, mild weather and ample hydropower in the US West pressured next-day gas prices for Monday at the PG&E Citygate in Northern California to $3.52 per mmBtu, its lowest since March 2021.

Data provider Refinitiv said average gas output in the US Lower 48 states rose to 101.5 billion cubic feet per day (bcfd) so far in May, which would top April’s monthly record of 101.4 bcfd.

Over the past few weeks, the average amount of gas flowing from Canada to the US averaged just 7.0 bcfd as wildfires in Alberta and other western provinces caused some producers to shut oil and gas output, according to Refinitiv.

That is well below the 8.4-bcfd average amount of gas Canada exported to the US since the start of the year and 2022’s average of 9.0 bcfd. About 8% of the gas consumed in, or exported from the US, comes from Canada.

Meteorologists projected the weather in the Lower 48 states would remain mostly near normal through June 6.

Refinitiv forecast US gas demand, including exports, would slide from 90.2 bcfd this week to 89.5 bcfd next week. The forecast for this week was higher than Refinitiv’s outlook on Friday, while its forecast for next week was lower.

Gas flows to the seven big US LNG export plants fell from a record 14.0 bcfd in April to an average of 12.9 bcfd so far in May due to maintenance work at several plants, including Cameron LNG in Louisiana and Cheniere Energy Inc’s Sabine Pass in Louisiana.