U.S. natural gas futures declined by approximately 2% on Tuesday amid lower gas flows to domestic liquified natural gas (LNG) plants. The downfall comes as milder weather forecasts drive down demand for heating.
Power generated by gas countrywide rose by 43% over the past week. This came as wind power generation slumped to just 5%, thereby forcing an uptick in power generation through gas in order to keep up with electricity demands.
Front-month gas futures for July delivery on the New York Mercantile Exchange declined by 1.9%, or 4.3 cents, to $2.202 per million British thermal units (mmBtu). A growing interest in the energy industry as well as the downward trend in prices has sparked investor interest, with interest in NYMEX gas futures rising to 1.389 million contracts on Monday; the most since September 2021.
According to Refinitiv data, U.S. gas demand is forecast to fall from 95.4 bcfd this week to 94.1 bcfd next week. This comes after U.S. exports to Mexico increased to an average of 7.5 bcfd so far in June, compared to 5.9 bcfd in May.