Natural gas prices have dropped significantly, by 6.85%, to finish at 272. The main causes of this fall include a combination of rising gas production, plenty of gas in storage, low demand, and mild weather. One factor contributing to the overstock is increased production in November, which increased from a record high in October.
Moreover, current gas storage levels are around 6% higher than average for this time of year. The surplus has increased due to lower heating demand brought on by warmer weather expectations until mid-November. Gas flows are increasing to U.S. LNG export facilities, but they are still below April’s high levels.
After falling since September, exports to Mexico are predicted to increase once LNG exports from New Fortress Energy’s facility begin. Gas output in the Lower 48 U.S. states increased to 106.6 bcfd in November, reaching a peak of 107.6 bcfd on Thursday, as reported by financial firm LSEG, suggesting a steady growth in production.
