07.08.202602:35:45UTC+00US Natural Gas Drops to Over 3-Month Low

US natural gas prices fell to $2.62 per MMBtu, the lowest level since April, pressured by a larger-than-expected storage build. According to the EIA, energy firms injected 33 bcf of gas into storage in the week ended July 31, surpassing market expectations of a 31 bcf increase, last year’s 13 bcf build, and the five-year average gain of 23 bcf.

At the same time, production remained near record highs despite a slight pullback, with Lower 48 dry gas output averaging 110.6 bcfd so far in August, just below July’s record 110.7 bcfd. LNG feedgas demand also continued to soften: average flows to the nine major LNG export facilities declined to 16.9 bcfd so far this month from 17.2 bcfd in July, partly due to reduced operations at the Freeport LNG plant in Texas and the continued reliance on a single operating liquefaction train at Golden Pass.

These bearish supply and demand dynamics outweighed support from expectations of stronger weather-driven consumption, even as forecasts call for mostly above-normal temperatures through August 21.