Natural gas is showing firmer market support as lower daily production combines with persistent warm weather and solid LNG export demand. Although storage levels remain healthy and overall US production is still high, near-term supply and demand conditions are becoming more supportive for prices.
Daily Lower 48 natural gas production was expected to fall to around 108.4 billion cubic feet per day, the lowest level in roughly two months. That decline reduces the immediate supply available to meet domestic and export demand at a time when warmer weather is extending cooling requirements.
The broader production trend remains strong, but the gap between current daily output and recent monthly averages is becoming more relevant to short-term pricing. September production has averaged about 113.2 bcfd, above the previous monthly record of 112.2 bcfd set in August.
Warmer-than-normal conditions are expected to continue through the end of September, which could keep electricity demand elevated as homes and businesses continue to use air conditioning. Natural gas remains a major fuel for US power generation, meaning sustained heat can quickly translate into stronger gas consumption.
Demand forecasts have been revised lower for the coming week, with total US gas demand, including exports, expected to ease from around 108.4 bcfd this week to 106.1 bcfd next week. Even so, the combination of lower production and continued warm weather creates a more balanced market than the headline demand decline alone would suggest.
Criterium Energy Ltd (TSXV:CEQ) is Canadian-based upstream energy company focused on the aggregation and sustainable development of assets in Southeast Asia that can deliver scalable growth and cash flow generation.
