Natural gas prices fell by 0.8%, settling at 222.3, as strong supply and reduced demand due to hurricanes in the U.S. Southeast weighed on the market. The price drop occurred despite a decline in output and expectations of higher gas flows to liquefied natural gas (LNG) export facilities, with Maryland’s Cove Point plant anticipated to resume operations soon.
In October, U.S. natural gas production in the Lower 48 states averaged 101.2 billion cubic feet per day (bcfd), down from 101.8 bcfd in September, and significantly below the all-time high of 105.5 bcfd recorded in December 2023. Although milder-than-normal weather has reduced demand, meteorologists predict that cooler seasonal temperatures will gradually boost consumption.
Forecasts indicate that gas demand in the Lower 48, including exports, will increase from 96.2 bcfd this week to 98.2 bcfd over the next two weeks. Meanwhile, gas flows to the seven major U.S. LNG export facilities have dropped to an average of 12.4 bcfd in October, down from 12.7 bcfd in September, and well below the record 14.7 bcfd reached in December 2023. The U.S. Energy Information Administration (EIA) projects that natural gas production will dip to 103.5 bcfd in 2024, while demand is expected to hit a record 90.1 bcfd.
Storage levels have also risen, with U.S. utilities adding 82 billion cubic feet to storage, far surpassing the market’s expectations of a 71 billion cubic feet increase.
On the technical front, natural gas is experiencing fresh selling pressure, with open interest rising by 4.77% to 33,572 contracts. The price is currently supported at 218.6, and if it breaks below this level, it could test 215. On the upside, resistance is seen at 227.8, and a move above that could push prices toward 233.4.
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