Natural Gas Prices Plummet as Pipeline Adds Supply Amid Easing Demand

Natural gas futures are in a downtrend, reaffirmed on Tuesday when sellers took out the July 29 main bottom at $2.666. The new multi-month low is $2.659.

The main range for September natural gas futures is $2.979 to $2.659, with its retracement zone serving as resistance between $2.819 and $2.857.

The Hugh Brinson pipeline, expected to reach full capacity of 1.5 Bcf per day by September 1, has added supply at an inopportune time for the market. With Permian producers having a bigger outlet to Henry Hub in Erath, Louisiana, storage is comfortable and power demand is easing.

The Lower-48 production was up 2.2% from a year ago on Tuesday, with the rig count holding at 127 last week, below February's high of 134 but still enough to keep output elevated. Commodity Weather Group shifted cooler temperatures in the Midwest and Northeast through August 18, which could reduce gas-fired power demand.