U.S. natural gas futures fell about 7% on Wednesday on a drop in preliminary gas flows to liquefied natural gas export plants in Texas.
That price drop came despite a preliminary decline in daily production and forecasts for colder weather and more heating demand next week than previously expected.
Front-month gas futures for February delivery on the New York Mercantile Exchange fell 23 cents or 6.7%, to $3.189 per million British thermal units.
In the cash market, average prices at the Waha Hub in the Permian Shale in West Texas remained in negative territory for the fifth time this year as pipeline constraints trapped gas in the nation’s biggest oil-producing basin.
Waha prices have averaged a negative 17 cents per mmBtu so far this year, compared with $1.15 in 2025 and a five-year average (2021-2025) of $2.88.
Daily Waha prices first averaged below zero in 2019. They did so 17 times in 2019, six times in 2020, once in 2023, a record 49 times in 2024, and 39 times in 2025.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the Lower 48 states slid to 109.3 billion cubic feet per day so far in January, down from a monthly record high of 109.7 bcfd in December.
On a daily basis, output was on track to drop to a preliminary two-month low of 107.4 bcfd on Wednesday due mostly to declines in Texas and Wyoming, according to LSEG data, down from 109.3 bcfd on Tuesday and a record 111.2 bcfd on December 21.
Meteorologists projected weather across the country would remain mostly colder than normal through January 29, with the most frigid days expected around January 17-21, which includes the U.S. Martin Luther King Jr. holiday weekend on January 17-19.
LSEG projected average gas demand in the Lower 48 states, including exports, would rise from 136.2 bcfd this week to 151.8 bcfd next week. The forecast for next week was higher than LSEG’s outlook on Tuesday.
Average gas flows to the eight large U.S. LNG export plants rose to 18.6 bcfd so far in January, up from a monthly record high of 18.5 bcfd in December.
But on a daily basis, LNG feedgas was on track to drop to a preliminary two-month low of 17.4 bcfd on Wednesday due to declines at Freeport LNG’s 2.4-bcfd plant in Texas and Cheniere Energy’s 3.9-bcfd Corpus Christi in Texas, down from 18.3 bcfd on Tuesday and a record 19.5 bcfd on January 12. The U.S. became the world’s biggest LNG exporter in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more low-cost U.S. gas, due in part to supply disruptions and sanctions linked to Russia’s 2022 invasion of Ukraine.
Gas was trading around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe, a three-month high, and around $10 at the Japan-Korea Marker (JKM) benchmark in Asia.
(Reporting by Scott DiSavino Editing by Rod Nickel)