Natural Gas Prices Plummet Amid Increased Supply and Soaring Temperatures

Natural gas prices in the US declined to $2.87 per million British thermal units on August 31, according to Trading Economics. The price drop comes as traders weigh the prospect of increased supply.

The Hugh Brinson Pipeline in Texas is scheduled to begin service on September 1, with a capacity to transport about 2.2 billion cubic feet per day of natural gas from the Permian Basin to East Texas. This could potentially boost domestic gas supplies in Erath, Louisiana.

US output has averaged a record 111.4 billion cubic feet per day so far in August, up from 110.7 billion cubic feet per day in July. However, losses were limited by forecasts for warmer weather. The Commodity Weather Group indicated that above-average temperatures are expected across the eastern two-thirds of the US from September 2-11.