US Natgas Prices Plummet Amid Record Output and LNG Flows Slump
US natural gas futures are trading near their lowest level in three months due to record output and lower flows to liquefied natural gas export plants. On Wednesday, the August contract on the New York Mercantile Exchange (NYMEX) fell by 0.9 cent or 0.3% to $2.653 per million British thermal units (mmBtu). This puts it on track for its lowest close since April 29 for a second day in a row.
The September contract, which will soon become the front-month, is trading around $2.72 per mmBtu, with a record high premium over August of a fifth day in a row. The average price of futures over the next 12 months has fallen to $3.12 per mmBtu, its lowest since November 2024.
According to LSEG, natural gas production in the US Lower 48 states has reached a record high of 110.6 billion cubic feet per day (bcfd) so far in July, up from 110.0 bcfd in June. This is partly due to higher than normal temperatures throughout the summer, which has forced power generators to burn more gas.
Analysts project that gas inventories have remained higher than usual since spring, with a surplus of 6.6% above normal during the week ended July 24. However, this surplus is expected to continue due to near-record output and lower flows to LNG export plants, which have eased to 17.2 bcfd so far in July.
The shutdown of the Energia Costa Azul export plant in Mexico due to damage to its refrigerant compressors has also contributed to lower LNG exports. The plant is expected to return online in the fourth quarter of 2026.