U.S. Natural Gas Prices Rise Slightly on Output Dip, Increased Demand
(Reuters) - U.S. natural gas futures edged up about 1% on Tuesday after the long U.S. Memorial Day holiday weekend, on a drop in output so far this month, forecasts for more demand this week than previously expected and hotter-than-normal weather this summer that should boost the amount of gas power generators burn to keep air conditioners humming.

On its second to last day as the front-month, gas futures for June delivery on the New York Mercantile Exchange rose 2.8 cents, or 0.8%, to $3.362 per MMBtu.
Futures for July, which will soon be the front-month, were unchanged at $3.73 per MMBtu.
That kept the premium of futures for July over June near a record high due in part to long-term projections for hotter-than-normal weather in June, July and August.
Even though gas futures were flat last week, speculators cut their net long futures and options positions on the New York Mercantile and Intercontinental exchanges for the first time in three weeks to their lowest since April, the U.S. Commodity Futures Trading Commission's Commitments of Traders report showed.
Some analysts projected energy firms added a near-normal amount of gas into storage during the week ended May 23 after injecting more gas than usual for five weeks in a row as mild weather kept both heating and cooling demand low. Gas stockpiles were currently around 4% above the five-year (2020-2024) average.
Supply and Demand
Financial firm LSEG said average gas output in the Lower 48 U.S. states fell to 105.0 billion cubic feet per day (B/cfd) in May, down from a monthly record of 105.8 B/cfd in April.
Energy traders said output reductions so far this month were due in part to maintenance on gas pipes, including U.S. energy firm Kinder Morgan's 2.7-B/cfd Permian Highway from the Permian basin in West Texas to the Texas Gulf Coast.
Kinder Morgan exchanged a turbine at the Big Lake compressor station from May 13-26.
Traders have noted the Permian Highway and other pipeline work trapped some gas in the Permian basin, causing spot gas prices at the Waha Hub in West Texas to slide into negative territory at least a couple of times over the past week or so, including for Tuesday.
Meteorologists projected the weather across the Lower 48 states would remain mostly warmer than normal through June 11.
LSEG forecast average gas demand in the Lower 48, including exports, will drop from 96.8 B/cfd this week to 95.4 B/cfd next week. The forecast for this week was higher than LSEG's outlook on Friday before the Memorial Day holiday on Monday, while the forecast for next week was lower.
The average amount of gas flowing to the eight big LNG export plants operating in the U.S. fell to 15.1 B/cfd in May, down from a monthly record of 16.0 B/cfd in April.
The LNG feedgas decline this month was mostly due to maintenance reductions at Cameron LNG's 2.0-bcfd plant in Louisiana, Cheniere Energy's 3.9-B/cfd Corpus Christi under construction and in operation in Texas and Cheniere's 4.5-B/cfd Sabine Pass in Louisiana, and brief unplanned reductions at Freeport LNG's 2.1-B/cfd plant in Texas.
Looking ahead, energy traders said they expect LNG feedgas to remain below April's record high in June with Cheniere planning about three weeks of maintenance on a couple of liquefaction trains at Sabine from around June 2-23.
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