Natural Gas Prices Plummet as Cooler Weather and LNG Exports Soften
Natural gas prices took a hit on Friday as cooler weather returned to the South and LNG exports softened. Despite inventories being down 3.9% from last year, they remain 3.7% above the five-year seasonal average, which is not enough to shift the balance in favor of the bulls.
The EIA projects that natural gas production will reach a record high by the end of October, with inventories expected to reach 3,985 bcf, the highest in over a decade. However, producers are adding rigs at current prices, which suggests they are not slowing down.
The LNG pull softened at the same time as the heat faded, and domestic demand is losing its strongest support. The European gas market also pulled back after a labor strike ended at France's Dunkirk LNG terminal, but the winter problem has not been solved yet.