US Natural Gas Prices Plummet to 11-Week Low on Record Output
US natural gas prices fell to an 11-week low on Monday due to record output and ample supplies in storage. The contract for August delivery on the New York Mercantile Exchange settled at $2.767 per million British thermal units, down 10.4 cents or 3.6% from the previous day.
The surge in production has been attributed to mostly mild weather during the spring, allowing energy firms to stockpile more gas than usual. According to LSEG, average gas output in the US Lower 48 states rose to a record high of 110.6 billion cubic feet per day in July.
The oversold territory for the contract has been reached for the first time since mid-July, with speculators holding their net short futures and options positions at their highest levels since March 2024. The premium of futures for September over August rose to a record high for a third consecutive day, indicating that the market is not concerned about supplies meeting demand in August.