U.S. natgas futures fall 5% to 7-week low on drop in LNG exports

U.S. natural gas futures fell 5% on Monday to a seven-week low on forecasts for less demand over the next two weeks than previously expected due to a reduction in LNG exports.

Gas flows to LNG export plants declined due to planned maintenance at Dominion Energy Inc's Cove Point in Maryland, the continued outage at Cameron in Louisiana and as some ships steer clear ofTropical Storm Beta, which is expected to lash the Texas and Louisiana coasts this week.

Front-month gas futures fell 10.5 cents, or 5.1%, to $1.943 per MM British thermal units (MMBtu) at 9:14 a.m. EDT (1314 GMT), putting the contract on track for its lowest close since July 31. That decline helped boost the premium of November futures over October NGV20-X20 to a record 63 cents per MMBtu.

Gas speculators, meanwhile, increased their net long positions on the New York Mercantile and Intercontinental Exchanges last week for the seventh time in eight weeks to the highest since May 2017 on expectations energy demand will rise as the economy rebounds once state governments lift more coronavirus-linked lockdowns.

Those long positions came despite expectations stockpiles will hit record highs by the end of October, which should remove lingering concerns about price spikes and gas shortages this winter.

Data provider Refinitiv said the amount of gas flowing to U.S. LNG export plants was on track to slide to a two-week low of 5.2 bcfd on Monday from a four-month high of 7.9 bcfd last week.

For the month, LNG feedgas averaged 5.6 bcfd so far in September. That was the most in a month since May and was up for a second month in a row for the first time since hitting a record 8.7 bcfd in February as global gas prices rise, making U.S. gas more attractive.

(Reporting by Scott DiSavino; Editing by Lisa Shumaker)

 

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