NEW YORK: US natural gas futures were little changed on Monday as forecasts for more demand next week than previously expected offset a rise in output over the weekend.
Other factors also kept prices in check, including a bullish increase in the amount of gas flowing to liquefied natural gas (LNG) export plants with the return to near full service of Freeport LNG’s plant in Texas and the bearish extreme oversupply of gas still in storage.
Analysts forecast the amount of gas in storage was around 31% above normal levels for this time of year.
Front-month gas futures for June delivery on the New York Mercantile Exchange remained unchanged at $2.253 per million British thermal units (mmBtu) at 8:55 a.m. EDT (1255 GMT).
Even with prices unchanged, the contract remained in technically overbought territory for a seventh day in a row for the first time since April 2022.
With gas prices up about 40% over the past two weeks, speculators last week switched their futures and options positions on the New York Mercantile and Intercontinental Exchanges from net short to net long for the first time since mid-January, according to the US Commodity Futures Trading Commission’s Commitments of Traders report.
Financial firm LSEG said gas output in the Lower 48 US states fell to an average of 97.2 billion cubic feet per day (bcfd) so far in May, down from 98.1 bcfd in April. That compares with a monthly record high of 105.5 bcfd in December 2023.
On a daily basis, however, output rose about 1.9 bcfd over the past five days to a four-week high of 98.0 bcfd on Sunday with the return from maintenance of some gas pipes in Texas from a 15-week low of 96.1 bcfd on May 7.
Despite the output increase over the weekend, US gas production was still down about 8% so far in 2024 after several energy firms, including EQT and Chesapeake Energy, delayed well completions and cut back on other drilling activities after prices fell to 3-1/2-year lows in February and March.
EQT is currently the biggest US gas producer and Chesapeake is on track to become the biggest producer after its merger with Southwestern Energy.
Meteorologists projected weather across the Lower 48 states would remain mostly near normal through May 28, except for some warmer-than-normal days from May 18-22.
LSEG forecast gas demand in the Lower 48, including exports, would rise from 92.1 bcfd this week to 92.9 bcfd next week. The forecast for next week was higher than LSEG’s outlook on Friday.
Gas flows to the seven big US LNG export plants rose from an average of 11.9 bcfd in April to 12.7 bcfd so far in May with the return of the 2.1-bcfd Freeport plant in Texas.