Gas prices fall 2% as exports drop to a four-month low; inventories remain 5.9% above normal levels and electricity demand may recover in late June
- On Tuesday, US natural gas futures prices fell by about 2%. The settlement price for the front-month contract for July delivery on the New York Mercantile Exchange was $3.117 per million British thermal units, down 6.2 cents. The main reason is that daily flows to LNG export terminals dropped to a four-month low, and are expected to fall further to 1.57 billion cubic feet per day on Tuesday.
- Due to maintenance at several plants during the spring, including the Golden Pass project (a joint venture between ExxonMobil and QatarEnergy) and the Freeport plant in Texas, since June the average flow at the nine major US LNG export terminals has dropped from 1.71 billion cubic feet per day in May to 1.60 billion cubic feet, whereas the record high in April was 1.88 billion cubic feet per day.
- In terms of production, since June, average daily natural gas output in the contiguous 48 US states has dropped to 108.8 billion cubic feet, below 109.7 billion cubic feet in May and the monthly record high of 110.6 billion cubic feet set in December 2025. Mild spring weather enabled energy companies to store more natural gas than usual; by the week ended May 29, inventories were about 5.9% above normal levels, slightly below the previous week's 6.2%.
- Weather forecasts show that temperatures will generally be warmer than normal before June 17, which should increase demand for natural gas by power plants to maintain air conditioning operations. About 40% of US electricity comes from gas-fired power plants. Financial groups predict that, including exports, US average natural gas demand in the 48 contiguous states will rise from 98.2 billion cubic feet per day this week to 101.0 billion cubic feet per day next week.
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