US Natural Gas Prices Plummet on Cooler Weather Outlook
US natural gas futures declined as forecasts shifted to show cooler weather in the coming weeks, suggesting a decline in demand for gas-fired electricity. The shift is significant because it means consumers will use fewer air-conditioners and therefore consume less gas.
The cooler outlook also coincides with Kinder Morgan's Gulf Coast Express pipeline expansion project entering service. This new capacity will move more gas out of the Permian Basin into surrounding regions, rather than being flared.
US gas flows to liquefied natural gas export facilities ticked down, increasing supply in the domestic market. Additionally, falling prices in the cash or daily gas markets may be weighing on futures prices, said Darrell Fletcher, managing director of commodities at Bannockburn Capital Markets.