US natural gas prices fall 3.5% on lower demand forecasts
UNG•US natural gas futures fell about 3.5% on Friday as forecasts showed Lower 48 demand dropping from 108.0 billion cubic feet per day this week to 102.8 bcfd next week. October futures settled at $3.18 per million British thermal units.
1. Futures decline
October natural gas futures fell 11.7 cents to $3.18 per mmBtu, after rising 9% on Thursday. The contract was up about 9% for the week. November futures fell about 3% to $3.26 per mmBtu.
2. Demand and storage
LSEG forecast Lower 48 demand, including exports, would fall to 102.8 bcfd next week from 108.0 bcfd this week, then rise to 105.5 bcfd in two weeks. Analysts estimated storage would be 2.4% above the five-year average for the week ended September 25, down from 2.9% the prior week.
3. Winter spread
The November contract's premium over October fell to a record low of about 7 cents per mmBtu, signaling limited concern about winter supplies meeting demand. US gas output averaged 112.5 bcfd so far in September, compared with a monthly record of 112.3 bcfd in August.
