U.S. natural gas futures climbed to $3.40 per million British thermal units (MMBtu), the highest level in a week, supported by a combination of tightening supply, rising demand expectations, and a shift toward hotter weather across key consuming regions.
US natgas prices rise to one-week high
Output in the Lower 48 states averaged 105.0 billion cubic feet per day (bcfd) so far in May, slipping from April’s record high of 105.8 bcfd. The decline is largely attributed to seasonal pipeline maintenance, including ongoing work on major infrastructure such as Kinder Morgan’s Permian Highway Pipeline, which has temporarily constrained flows from one of the nation’s most prolific producing basins.
On the demand side, meteorological models continue to indicate above-average temperatures across large swathes of the country through at least mid-June, particularly in the South and Midwest. This is expected to significantly boost power sector demand for natural gas as air conditioning use ramps up, reinforcing upward pressure on prices during the early summer cooling season. In addition, storage injections are expected to moderate due to stronger power burn and reduced production, helping to narrow the inventory surplus relative to the five-year average.
Deliveries to U.S. LNG export terminals fall
Meanwhile, natural gas deliveries to U.S. liquefied natural gas (LNG) export terminals fell to an average of 15.1 bcfd in May, down from April’s all-time high of 16.0 bcfd. The decline reflects planned maintenance outages at key export facilities, including Cameron LNG, Corpus Christi, Sabine Pass, and Freeport. These maintenance cycles have temporarily reduced export capacity, though demand for U.S. LNG abroad remains robust amid tight global supplies and geopolitical uncertainties. Looking ahead, LNG feedgas volumes are expected to remain subdued in early June, with Cheniere Energy scheduling maintenance at its Sabine Pass terminal from June 2 through June 23, which will likely weigh on near-term export volumes.
Despite the temporary dip in LNG feedgas, the overall market outlook remains bullish as the combination of lower supply, stronger weather-driven demand, and resilient export interest continues to support prices. Market participants are also closely monitoring the Atlantic hurricane season, which officially begins in June and could pose additional risks to Gulf Coast production and infrastructure, potentially adding further volatility to the gas market in the weeks ahead.
