U.S. natural gas futures fell about 4% to a six-week low on Thursday on expectations gas flows to liquefied natural gas (LNG) export plants will remain low through late August due to planned maintenance at Freeport LNG’s plant in Texas, and after the release of a federal report showing last week’s storage build was much bigger than expected. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 13.9 cents, or 4.3%, to $3.073 per million British thermal units (mmBtu), putting the contract on track for its lowest close since May 27. Freeport LNG told Reuters in an email that it planned to start major maintenance at the plant from July 10 through late next month. The U.S. Energy Information Administration (EIA) said energy firms added 61 billion cubic feet of gas to storage during the week ended July 3. That was much bigger than the 49-bcf build analysts forecast in a Reuters poll and compares with an increase of 53 bcf during the same week last year and a five-year (2021-2025) average increase of 51 bcf for the period.
SUPPLY AND DEMAND:
Financial group LSEG said average gas output in the U.S. Lower 48 states slid to 109.7 billion cubic feet per day (bcfd) so far in July, down from 110.0 bcfd in June and a monthly record high of 110.6 bcfd in December 2025.
Meteorologists forecast the weather would remain mostly warmer than normal through July 24, keeping the amount of gas power generators burn high as homes and businesses crank up air conditioners. 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 slide from 109.8 bcfd this week to 109.1 bcfd next week. The forecast for next week was lower than LSEG’s outlook on Wednesday.
Average gas flows to the nine big U.S. LNG export plants have risen to 17.8 bcfd so far in July, up from 17.4 bcfd in June, but remain below the monthly record high of 18.8 bcfd in April. In other LNG news, the first 0.4-bcfd phase of Sempra Infrastructure/TotalEnergies’ Energia Costa Azul plant in Mexico shipped its first cargo, which is destined for Asia.
Analysts have said gas consumers in California will compete with Costa Azul for gas supplies from the Permian shale in Texas and New Mexico.
(Reporting by Scott DiSavino Editing by Nick Zieminski and Chizu Nomiyama)