Nymex natural gas prices dropped sharply on Monday as updated weather forecasts indicated a warming trend mid-month, potentially reducing heating demand. Last Friday, prices hit a 3-year high due to below-normal temperatures. US natural gas production and demand were up significantly, with LNG net flows to export terminals also increasing slightly.

Higher US natural gas production is pressuring prices, with forecasts showing a record high production level. The weekly EIA report from last Thursday revealed a smaller-than-expected draw in natural gas inventories, signaling adequate supply levels. Additionally, active drilling rigs have increased over the past year, nearing a 2.25-year high.

Supportive factors for gas prices include an increase in US electricity output, according to the Edison Electric Institute. However, the EIA raised its forecast for 2025 US natural gas production, contributing to bearish sentiment. Gas storage levels in Europe were slightly below the seasonal average, while US storage levels remained relatively high.

Read more at Yahoo Finance: Nat-Gas Prices Plunge as US Weather Forecasts Warm