US natural gas prices slide 2% to 14-week low on big storage build

Financial firm LSEG said average gas output in the U.S. Lower 48 states has eased to 110.6 billion cubic feet per day (bcfd) so far in August, down from a monthly record high of 110.7 bcfd in July.

Meteorologists forecast the weather would remain mostly warmer than normal through August 21, forcing power generators to continue burning lots of gas to keep air conditioners operating. About 40% of U.S. power generation comes from gas-fired plants.

LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 112.2 bcfd this week to 115.2 bcfd next week.

Average gas flows to the nine big U.S. LNG export plants slid to 16.9 bcfd so far in August due in part to recent reductions at Freeport LNG's 2.4-bcfd plant in Texas and the one 0.8-bcfd liquefaction train operating at Exxon Mobil and QatarEnergy's Golden Pass in Texas.

That reading puts LNG feedgas down from an average of 17.2 bcfd in July and a monthly record high of 18.8 bcfd in April.

The U.S. Energy Information Administration said energy firms added 33 billion cubic feet (bcf) of gas to storage during the week ended July 31.

That figure was in line with the 31-bcf build analysts forecast in a Reuters poll and compares with an increase of 13 bcf during the same week last year and a five-year (2021-2025) average increase of 23 bcf for the period.

U.S. gas inventories have remained in surplus despite weeks of above-normal temperatures so far this summer. Stockpiles stood 6.7% above the five-year average.

U.S. natural gas futures slid about 2% to a 14-week low on Thursday on a bearish federal report showing energy firms added more gas into storage than usual for a third week in a row.