US natural gas prices slide 2% to 1-week low on lower demand forecasts

By Scott DiSavino

June 10 (Reuters) - U.S. natural gas futures slid about 2% to a one-week low on Tuesday on forecasts for lower demand over the next two weeks than previously expected due in part to a drop in the amount of gas flowing to liquefied natural gas (LNG) export plants because of ongoing spring maintenance at several facilities.

Gas futures NGc1 for July delivery on the New York Mercantile Exchange were down 5.5 cents, or 1.5%, to $3.58 per million British thermal units at 9:08 a.m. EDT (1308 GMT), putting the contract on track for its lowest close since May 30 for a second day in a row.

Looking ahead, the premium of gas futures for November 2025 NGV25-X25 over October 2025 rose to its highest since August 2023 due to bigger increases in the November contract than the October contract since the start of the year. That means the market is likely betting on higher demand, lower supplies and/or lower amounts of gas in storage at the start of the coming winter.

The winter heating season when utilities pull gas from storage runs from November to March, while the summer cooling season when energy firms inject gas into storage for use in the winter runs from April to October.

Fast-growing volumes of gas in storage have kept futures prices in check in recent weeks.

The last time energy firms added 100 bcf or more of gas into storage for seven weeks in a row was in June 2014, according to federal energy data going back to 2010.

Low cash prices also have kept pressure on futures prices over the past month.

Next-day gas prices at the U.S. Henry Hub benchmark NG-W-HH-SNL in Louisiana were trading around $3.13 per mmBtu - spot contracts have remained below front-month futures every day since late April. Energy traders said the spot price was up from a six-month low in the prior session due to pipeline work that cut daily output.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states has eased to 105.0 billion cubic feet per day so far in June, down from 105.2 bcfd in May and a monthly record high of 106.3 bcfd in March due primarily to normal spring maintenance.

On a daily basis, output was on track to drop by 3.2 bcfd to a preliminary four-month low of 102.6 bcfd on Tuesday. Analysts have noted that preliminary data is often revised later in the day.

LSEG forecast average gas demand in the Lower 48, including exports, would rise from 98.1 bcfd this week to 100.4 bcfd next week. Those forecasts were lower than LSEG's outlook on Monday.

The average amount of gas flowing to the eight big U.S. LNG export plants has fallen to 13.8 bcfd so far in June, down from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.

Traders said LNG feedgas reductions since April were primarily due to spring maintenance, including work at Cameron LNG's 2.0-bcfd plant in Louisiana and Cheniere Energy's LNG.N 4.5-bcfd Sabine Pass facility in Louisiana and 3.9-bcfd Corpus Christi plant in Texas, and short, unplanned unit outages at Freeport LNG's 2.1-bcfd plant in Texas on May 6, May 23, May 28 and June 3.

Energy traders have noted that LNG maintenance would likely continue through mid-June at Cameron and late-June at Sabine.