US gas futures retreat as milder weather cuts demand outlook

what happened

Newsmetry API reports that US natural gas futures ended Monday about 2% lower as forecasts pointed to milder conditions and weaker demand next week. The November contract on NYMEX shed 5.3 cents, or 1.6%, finishing at $3.167 per million British thermal units. Prices were still positioned for a third consecutive monthly gain.

The decline was partly checked by a four-month low in daily production and a five-month peak in flows to the nine major US LNG export facilities. LSEG said average output across the Lower 48 states fell to 110.7 bcfd in October from record levels of 113.3 bcfd in August and September. Monday’s production was expected to reach roughly 108.9 bcfd.

LSEG projected total Lower 48 demand, exports included, would climb from 104.8 bcfd this week to 107.4 bcfd next week, although the latest estimate was below Friday’s forecast. US inventories rose by 77 bcf in the week ended Oct. 9 to 3,577 bcf, according to the table cited in the report, leaving stocks 1.6% above the five-year average. In the spot market, next-day gas at Enbridge South in southwest Pennsylvania fell to about 61 cents per mmBtu, its lowest level since November 2020.

why it matters

The softer demand outlook weighs on US gas, while production disruptions and the return of Freeport LNG and Cove Point toward normal service support export flows. The competing forces are shaping both futures and regional spot prices.

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