That price decline came despite forecasts for cooler weather and higher heating demand next week, a 6% increase in European gas prices, the start of a new liquefaction terminal in Louisiana and record U.S. liquefied natural gas (LNG) exports.
In October, global gas prices soared to record highs as utilities scrambled for LNG cargoes to refill low stockpiles in Europe and meet rising demand in Asia, where energy shortfalls have caused power blackouts in China.
Analysts have said European inventories were about 15% below normal for this time of year versus just 3% below normal in the United States.
U.S. futures also climbed to a 12-year high early in October, on expectations for months of strong LNG demand, but overseas prices rose more because the United States has plenty of gas in storage and ample production.
Gas prices in Europe and Asia were still trading about five times higher than in the United States.
Front-month gas futures fell 8.9 cents, or 1.6%, to settle at $5.427 per million British thermal units (mmBtu), their lowest close since Nov. 1.
As the amount of gas in U.S. stockpiles kept rising, speculators last week cut their net long positions on the New York Mercantile and Intercontinental Exchanges for a fifth week to their lowest since June 2020, according to data from the Commodity Futures Trading Commission (CFTC).
Data provider Refinitiv said output in the U.S. Lower 48 states averaged 95.8 billion cubic feet per day (bcfd) so far in November, up from 94.1 bcfd in October and a monthly record of 95.4 bcfd in November 2019.
On a daily basis, output reached 97.4 bcfd on Saturday, topping the prior daily record of 96.6 bcfd in November 2019.
Refinitiv projected average U.S. gas demand, including exports, would jump from 97.0 bcfd this week to 105.8 bcfd next week as the weather turns seasonally colder and homes and businesses crank up their heaters.
The forecast for next week was higher than Refinitiv projected on Friday.
The amount of gas flowing to U.S. LNG export plants has averaged 11.0 bcfd so far in November, up from 10.5 bcfd in October. That compares with a monthly record of 11.5 bcfd in April.
Feed gas to Cheniere Energy Inc’s Sabine Pass LNG export plant in Louisiana hit a record 4.4 bcfd on Friday as the facility’s sixth liquefaction train started producing its first LNG.