Natural gas prices in the United States fluctuated between $2.8 and $2.9 per million British thermal units on Tuesday. These fluctuations are due to assessments of production, storage, and weather trends.
Increased production and high gas demand
Average production in the lower 48 states reached 113.0 billion cubic feet per day in September, surpassing the August record of 112.2 billion cubic feet per day. However, forecasts indicate that daily gas production on Tuesday will decrease to its lowest level in the past 11 weeks, at 109.8 billion cubic feet per day.
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Strong production and mild weather have helped maintain inventories above the five-year average, but rising temperatures in the summer have increased gas demand for electricity generation and reduced the surplus.
Inventory status and weather forecasts
Analysts estimate that inventories in the week ending September 18 were 3% above normal, down from 3.7% previously. Current weather forecasts indicate predominantly normal conditions through October 7.
Meanwhile, average gas flows to the nine major U.S. LNG export facilities increased to 18 billion cubic feet per day in September, a significant rise from 17.2 billion cubic feet per day in August. This increase occurred despite the temporary shutdown of the Cove Point LNG facility with a capacity of 0.8 billion cubic feet per day for scheduled maintenance.
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