US Natgas Prices Slide Over 6% on Mild Weather, Lower Demand

The decline marked a weak end to the second quarter, with prices dropping nearly 15% over the three-month period, snapping four straight quarters of gains and marking the worst performance since January 2024.

“The weather has moderated from that heat we just had, the prices are easing off a little bit,” said Thomas Saal, senior vice president for energy at StoneX Financial.

“The market (had initially) shown quite a resilience to additional production or additional supply going into storage. So the storage injections have been rather hefty and so that has kind of revealed that the market is well supplied and that has been weighing on prices.”

Peak demand will likely come in July or August as broader heat sets in, Saal said, adding that while there had been some hot weather, it hadn’t yet covered most major gas-consuming regions, so the real test is still ahead.

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states rose to 105.9 billion cubic feet per day so far in June, up from 105.2 bcfd in May, but still below the monthly record high of 106.3 bcfd in March due primarily to normal spring pipeline maintenance earlier in the month.

LSEG estimated 199 total degree days (TDDs) over the next two weeks, compared with 234 estimated on Friday. It also forecast average gas demand in the Lower 48, including exports, dipping slightly to 105 billion cubic feet per day (bcfd) next week from 105.4 bcfd in the current week.

The normal for this time of year is 170 TDDs. Total degree days measure the number of degrees a day’s average temperature is above or below 65 degrees Fahrenheit (18 degrees Celsius) to estimate demand to cool or heat homes and businesses.

The average amount of gas flowing to the eight big U.S. LNG export plants fell to 14.3 bcfd so far in June, down from 15.0 bcfd in May and a monthly record high of 16.0 bcfd in April.

Meanwhile, U.S. energy companies are eyeing renewed opportunities to build natural gas pipelines to tap into Appalachia shale formations in Pennsylvania, Ohio and West Virginia, buoyed by U.S. President Donald Trump’s pro-fossil fuel energy policies and expectations that demand for the fuel will rise in coming years.

Despite being the world’s top natural gas producer and LNG exporter, many consumers in the U.S. Northeast remain cut off from gas access due to limited pipeline infrastructure, relying instead on heating oil in their homes and businesses.

Dutch and British wholesale gas prices edged lower on Monday morning as supply remained strong with rising demand from warmer temperatures across much of Europe offset by weaker demand for heating.