Natural gas prices dropped 2.33% to 285.3, pressured by a smaller-than-expected decline in production, lower flows to LNG export terminals, and a muted demand forecast.
In May so far, production in the Lower 48 U.S. states averaged 103.7 billion cubic feet per day (bcfd). This is down from April’s record high of 105.8 bcfd, but the drop was less than expected, indicating ample supply.
Demand is expected to stay steady at about 96.3 bcfd over the next two weeks before easing slightly to 94.0 bcfd. LNG exports also declined, averaging 15.1 bcfd in May so far, compared to April’s record 16.0 bcfd. This points to lower export-driven demand.
Storage levels remain healthy. U.S. utilities added 110 billion cubic feet (Bcf) of natural gas to storage during the week ending May 9, matching forecasts. Current inventories stand at 2,255 Bcf, 57 Bcf above the five-year average. This buffer provides comfort heading into the busy summer cooling season.
The U.S. Energy Information Administration (EIA) stays optimistic about the long-term outlook. It expects production and consumption to reach record highs in 2025.
From a technical standpoint, the market faces fresh selling pressure. Open interest rose 1.56% to 16,301 even as prices fell by 6.8. Support levels are seen at 280.9 and 276.5, while resistance may appear at 292.5 and 299.7 if prices rebound.
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