(Reuters) – U.S. natural gas futures slid about 4% to an 11-week low on Monday on record output, lower flows to liquefied natural gas export plants, and ample amounts of gas in storage. Front-month gas futures for August delivery on the New York Mercantile Exchange fell 10.4 cents, or 3.6%, to settle at $2.767 per million British thermal units. The contract fell to its lowest level since May 7 earlier in the session.
That also pushed the contract into technically oversold territory for the first time since mid-July. With futures down more than 15% so far this month, speculators last week boosted their net short futures and options positions on the NYMEX and Intercontinental Exchange to their highest levels since March 2024, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report.
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Looking ahead, the premium of futures for September over August rose to a record high for a third day in a row, a sign that the market does not seem worried about supplies meeting demand in August, the last month of the peak summer air-conditioning season.
SUPPLY AND DEMAND
Financial firm LSEG said average gas output in the U.S. Lower 48 states has risen to 110.6 billion cubic feet per day so far in July, up from 110.0 bcfd in June and in line with the monthly record high of 110.6 bcfd in December 2025.
On a daily basis, output rose to a daily record high of 112.3 bcfd on Sunday, topping the prior all-time highs of 112.2 bcfd on Saturday and 112.1 bcfd on December 21, 2025.
Analysts said mostly mild weather during the spring allowed energy firms to stockpile more gas than usual.
As they wait for a federal report on Thursday, analysts projected the amount of gas in storage likely rose to 6.6% above normal during the week ended July 24, up from 6.4% above normal during the previous week.
Meteorologists forecast the weather would remain mostly warmer than normal through August 11, forcing power generators to continue burning lots of gas to keep air conditioners humming. 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 rise from 110.8 bcfd this week to 113.3 bcfd next week. The forecast for this week was lower than LSEG’s outlook on Friday. Average gas flows to the nine big U.S. LNG export plants have eased to 17.2 bcfd so far in July due in part to maintenance at Freeport LNG’s export plant in Texas, down from 17.4 bcfd in June and the monthly record high of 18.8 bcfd in April.
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. Global gas prices have spiked in recent years primarily due to supply disruptions linked to Russia’s invasion of Ukraine in 2022 and the U.S.-Israeli war with Iran this year.
Around the world, gas was trading around $20 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe, and near a four-month high of about $22 at the Japan-Korea Marker (JKM) benchmark in Asia.
Reporting by Scott DiSavino; Editing by Jan Harvey and Andrea Ricci
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