FX.co ★ US Natural Gas Extends Drop

US natural gas futures declined to $2.73 per MMBtu, extending losses to their lowest level in nearly twelve weeks, as robust production, ample inventories, and subdued LNG feedgas demand continued to pressure prices. Average gas output in the US Lower 48 has risen to 110.6 bcfd so far in July, up from 110.0 bcfd in June, matching the monthly record high last seen in December 2025.

The production increase has intensified concerns about an oversupplied market. As of July 17, gas storage levels stood 6.4% above the five-year seasonal average and are projected to widen to 6.6% above normal for the week ending July 24.

LNG export demand has also eased, with gas flows to major export terminals averaging 17.2 bcfd so far this month, slightly below June’s 17.4 bcfd. The decline is partly attributed to scheduled maintenance at Freeport LNG’s facility in Texas.

At the same time, temperatures are expected to remain mostly above normal through August 11, which should keep gas demand from power generators elevated as they meet ongoing cooling needs.