US natgas prices ease to 2-week low on big storage build, lower LNG export flows

By Scott DiSavino

Sept 11 (Reuters) - U.S. natural gas futures eased about 1% to a two-week low on Thursday on a big storage build last week and recent declines in gas flows to liquefied natural gas export plants.

Front-month gas futures for October delivery NGc1 on the New York Mercantile Exchange fell 4.2 cents, or 1.4%, to $2.987 per million British thermal units at 10:33 a.m. EDT (1433 GMT), putting the contract on track for its lowest close since August 28.

That price decline came despite a recent drop in output and forecasts for warmer weather and more demand next week than previously expected.

The U.S. Energy Information Administration said energy firms injected 71 billion cubic feet of gas into storage during the week ended September 5.

That was close to the 70-bcf build analysts forecast in a Reuters poll and compares with an increase of 36 bcf during the same week last year and an average build of 56 bcf over the past five years. EIA/GAS NGAS/POLL

In the spot gas market, meanwhile, prices at the Waha Hub NG-WAH-WTX-SNL in the Permian shale in West Texas fell by 89% to just 7 cents per mmBtu, their lowest since late May when they traded in negative territory.

Traders noted the Waha price drop was a sign that pipeline constraints, such as maintenance on Kinder Morgan's KMI.N Gulf Coast Express in Texas, were trapping gas in the Permian basin.

In the tropics, the U.S. National Hurricane Center said a disturbance near the Cape Verde Islands off the west coast of Africa had a 30% chance of strengthening into a tropical cyclone over the next seven days as it heads west across the ocean. The system is not expected to reach land in North America during that time.

Hurricanes, which can boost gas prices by cutting output along the U.S. Gulf Coast, are more likely to reduce prices when they shut LNG export plants and knock out power to homes and businesses. About 40% of the power generated in the U.S. comes from gas-fired plants.

With the historic September 10 peak of the Atlantic hurricane season now past, weather forecaster AccuWeather reduced its forecast of the number of named storms and hurricanes in the Atlantic this year due to a mid-season lull, but noted the risk for U.S. direct impacts remained unchanged.

AccuWeather now forecasts 13-16 named storms, including six to nine hurricanes, for the June-November hurricane season. That is down from AccuWeather's previous forecast of 13-18 named storms, including seven to 10 hurricanes.

So far in 2025, there have been six named storms, one of which became a major hurricane, Erin.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 states fell to 107.3 billion cubic feet per day so far in September, down from a record monthly high of 108.3 bcfd in August.

On a daily basis, output was on track to drop to a preliminary two-month low of 105.8 bcfd on Thursday due primarily to declines in Pennsylvania and West Virginia, down from an average of 107.3 bcfd over the prior seven days. That compares with a daily record high of 109.6 bcfd on July 29.

LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 101.1 bcfd this week to 103.6 bcfd next week. The forecast for next week was higher than LSEG's outlook on Wednesday.

The average amount of gas flowing to the eight big U.S. LNG export plants eased to 15.6 bcfd so far in September, down from 15.8 bcfd in August. That compares with a monthly record high of 16.0 bcfd in April.