US Natgas Prices Drop Amid Record Output and Tropical Storm Edouard

US natural gas futures fell by about 3% on Tuesday due to record output and forecasts of less hot weather in the coming weeks. Tropical Storm Edouard is expected to approach the Gulf Coasts of Texas and Louisiana, potentially reducing gas demand.

The price drop was also attributed to a slight reduction in gas flows to Freeport LNG's export plant in Texas as the storm approaches. Record output and mild spring weather have allowed energy firms to maintain higher-than-average gas inventory levels since March.

Average gas production in the US Lower 48 states reached a record high of 111.5 billion cubic feet per day (bcfd) in August, up from the previous all-time monthly high of 110.7 bcfd in July. Analysts forecast that gas inventories have remained in surplus despite above-normal temperatures this summer.

Meteorologists predict warmer-than-normal weather through September 16, which could lead to increased power generation and higher gas demand. Average gas flows to the nine major US LNG export plants rose to 18.3 bcfd so far in September, up from 17.2 bcfd in August.