Nymex natural gas futures for June delivery settled down 2.8% at $2.788 per million British thermal units (mmBtu), giving back gains from the previous session amid weak near-term demand and lower flows to export terminals.
"Recent dips in production are showing signs of recovering higher, and LNG feedgas demand is deteriorating amid seasonal maintenance,” Eli Rubin of EBW Analytics said in a note. The declines in liquefied natural gas are “seasonal not structural,” he added.
The drop in natural gas prices comes as the broader energy complex sees mixed trends. While crude oil benchmarks like Brent and WTI have been volatile due to geopolitical tensions in the Middle East, natural gas fundamentals are currently being driven by domestic factors. US gas futures have been weighed down by lower feedgas flows to LNG export terminals.
Power-sector consumption provides the clearest support for demand as forecasts warm and early cooling requirements begin to appear for mid-May, according to a note from Gelber & Associates. The market may find a stronger price floor if the pull from exports returns and power burn builds into the second half of the month.
This article is for informational purposes only and does not constitute investment advice.
