U.S. natgas futures slip on surplus ahead of contract expiry

U.S. natural gas futures slid over 5% on Monday before paring some losses on their last day as the contract for October delivery on a continued supply surplus and as threat of storms in the Atlantic Ocean dissipated.

The decline in futures prices came despite a projected increase in LNG exports. Front-month gas futures for October delivery fell 8 cents, or 3.7%, to $2.059 per million British thermal units (mmBtu) at 9:49 a.m. EDT (1349 GMT), having earlier dropped as much as 5.1% to $2.03 per mmBtu. November futures, which will be the front-month beginning on Tuesday, were down about 8 cents at $2.726 per mmBtu.

"Although the long standing supply surplus will likely be contracting significantly next month, we still see a possible season ending supply of almost 4.1 tcf should next month's temperatures remain mild," advisory firm Ritterbusch and Associates said in a note.

"... The Atlantic remains devoid of any threatening tropical storm development in possibly forcing the complex to erase some additional storm premium."

Data provider Refinitiv projected supply would rise from 91.1 billion cubic feet per day (bcfd) last week to 91.2 bcfd this week, before contracting to 91.1 bcfd again in the next week.

LNG exports were forecast to reach 6.2 bcfd this week, according to Refinitiv data, as vessels returned to Gulf Coast terminals after Tropical Storm Beta dissipated.

(Reporting by Harshith Aranya in Bengaluru; editing by Jonathan Oatis)

 

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