U.S. natural gas futures fell on Friday, reversing earlier gains and finishing down for the week.
Front-month gas futures for September delivery fell 7.9 cents, or 0.8%, to settle at $9.296 per million British thermal units (mmBtu). For the week, the front-month was down about 0.7%.
“Traders pared back their positions going into the weekend… The weather outlook is cooling a bit,” said Phil Flynn, analyst at Price Futures Group.
“We also have the expiration of the September contract, which probably led to some people getting out of positions and contributed to some volatility,” Flynn added.
So far this year, the gas front-month was up about 150% as higher prices in Europe and Asia keep demand for U.S. LNG exports strong. Global gas prices have soared this year following supply disruptions linked to Russia’s invasion of Ukraine.
Gas was trading around $86 per mmBtu in Europe and $70 in Asia.
Some analysts said any boost from global gas prices could be capped by limited capacity for U.S. exports especially after the fire-hit Freeport LNG export hub in Texas extended its outage.
Early this week, prices hit $10 per mmBtu for the first time since 2008, but retreated after the Freeport LNG announcement, which would translate into more stockpiles available in the U.S.
On Thursday, the U.S. Energy Information Administration on Thursday reported an injection of 60 billion cubic feet (bcf) of gas to storage during the week ended Aug. 19, mostly in line with expectations.
The Freeport outage was, meanwhile, also seen limiting potential U.S. supply to Europe heading into winter. The region was also gearing for a scheduled outage on the Nord Stream pipeline that could hit supplies of Russian supply.
“With record high European pricing adding a new element to this year’s market equation, we expect some continued wide price swings as we still see an advance in October futures back to the $10 area as a minimum,” Ritterbusch and Associates said in a note.