Natural Gas Prices Drop Due to Cooler Weather Forecasts, Demand Decrease

Natural gas prices experienced a sharp decline due to cooler weather forecasts in the US, reducing demand from energy providers. This decrease comes after natural gas prices hit a 6-week low on Monday, with US supplies remaining plentiful. US electricity output rose, contributing to increased demand for natural gas.

Lower-48 state dry gas production and demand statistics show a 3.9% year-over-year increase in production and a 6.8% year-over-year decrease in demand. LNG net flows to US export terminals also decreased slightly week over week. The number of active US natural gas drilling rigs fell slightly, but has risen significantly in the past nine months.

The weekly EIA report indicated a rise in natural gas inventories, signaling adequate supply levels. Despite a year-over-year decrease in inventories, current levels are above the 5-year seasonal average. Gas storage in Europe is also above the 5-year seasonal average. The overall outlook for natural gas prices remains stable.

Read more at Yahoo Finance: Nat-Gas Prices Slip as US Weather Forecasts Cool