Natural gas futures edged lower on Friday, reversing early gains as a decline in feedgas flows to US liquefied natural gas (LNG) export terminals signaled reduced demand from the domestic market. June Nymex natural gas (NGM26) settled at a loss of 0.012, or 0.43%, as market participants weighed the impact of seasonal maintenance at several Gulf Coast export facilities.
LNG Feedgas Drops as Plants Undergo Scheduled Work
Data from BloombergNEF (BNEF) showed that feedgas deliveries to US LNG terminals fell to 17.7 billion cubic feet (bcf) on Friday, a decline of 4.6% week-over-week. The reduction is typical for this time of year, as export plants pause operations for routine maintenance ahead of the peak summer cooling season. When LNG exports slow, more gas remains available for domestic storage, putting downward pressure on prices.
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Despite the short-term bearish signal, the broader context for US natural gas remains complex. Domestic storage levels are well above average, with the Energy Information Administration (EIA) reporting inventories as of May 1 at 2.8% higher year-over-year and 6.7% above the five-year seasonal average. The weekly storage build of 63 bcf fell short of market expectations of 72 bcf and the five-year average of 77 bcf, offering some support to prices.
Production Remains Near Record Highs
US dry natural gas production continues to run at elevated levels, further contributing to ample supply. The EIA raised its 2026 production forecast to 109.59 bcf per day in April, up from its March estimate of 109.49 bcf. Actual output on Friday reached 110.6 bcf per day, up 3.9% year-over-year. The number of active natural gas drilling rigs, while slightly off recent highs, remains near a 2.5-year peak, suggesting producers are maintaining strong output.
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Demand-side data provided a mixed picture. US lower-48 gas demand on Friday was 67.5 bcf per day, a modest 0.8% increase year-over-year. Electricity output in the week ending May 2 rose 0.1% year-over-year, according to the Edison Electric Institute, while the 52-week rolling total was up 1.7%.
Global Supply Disruptions Offer Medium-Term Support
While the near-term outlook is weighed down by high inventories and seasonal maintenance, several geopolitical factors could support US natural gas prices in the medium term. Damage to Qatar’s Ras Laffan LNG plant, the world’s largest, following attacks in March has removed significant global supply. Qatar reported that 17% of the facility’s export capacity was damaged, with repairs expected to take three to five years. The plant accounts for roughly 20% of global LNG supply.
Additionally, the continued closure of the Strait of Hormuz amid regional conflict has sharply curtailed natural gas shipments from the Middle East to Europe and Asia. This disruption is expected to increase demand for US LNG exports, potentially tightening the domestic market once maintenance schedules conclude.
European gas storage levels also remain below average, standing at 34% full as of May 6 compared to the five-year seasonal average of 47%, which could support stronger export demand later in the year.
Conclusion
The combination of seasonal maintenance at LNG export terminals, reliable domestic production, and above-average storage levels has created a near-term headwind for natural gas prices. However, structural supply disruptions in the Middle East and Qatar, along with below-average European storage, suggest that the current price weakness may be temporary. Traders and energy analysts will be watching for the conclusion of maintenance work and any shifts in global demand patterns that could tighten the US market.
FAQs
Q1: Why did natural gas prices fall on Friday?
Prices declined as feedgas flows to US LNG export terminals dropped 4.6% week-over-week due to seasonal maintenance, leaving more gas available for domestic storage and pressuring prices lower.
Q2: How does LNG export maintenance affect US natural gas prices?
When LNG plants reduce operations, less natural gas is exported, increasing domestic supply. This typically pushes prices down in the short term, especially when storage levels are already high.
Q3: What could support natural gas prices in the coming months?
Global supply disruptions, including damage to Qatar’s Ras Laffan plant and the closure of the Strait of Hormuz, are expected to boost demand for US LNG exports once maintenance ends, potentially tightening the domestic market and supporting higher prices.
