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Futures Under Pressure, But Summer's "Remaining Heat" May Support Prices (1) Although US natural gas futures prices have recently hovered near a two-week low, expectations of warmer weather, which could support summer air conditioning demand in the coming weeks, have partially offset the impact of declining liquefied natural gas (LNG) exports. Natural gas futures for October delivery have risen slightly, but have fallen approximately 4% this week, marking their first weekly decline in three weeks. (2) In the spot market, natural gas prices in the Waha region of the Permian Basin in West Texas remained low at around 7 cents per million British thermal units for the second consecutive day, reaching their lowest level since late May. Traders believe this reflects pipeline constraints, such as maintenance on Kinder Morgan's Gulf Coast Express pipeline in Texas, which has led to a backlog of natural gas in the Permian Basin. (3) On the supply side, natural gas production in the Lower 48 states has fallen to 107.4 billion cubic feet per day so far in September, down from a record high of 108.3 billion cubic feet in August. Record production so far this year has allowed energy companies to pump more natural gas into storage tanks than in previous years. Storage levels are currently about 6% higher than normal for this time of year, and this percentage is expected to continue to rise in the coming weeks. On the demand side, weather forecasts indicate that temperatures will remain above normal until at least September 27th, which will increase the amount of natural gas burned by power plants to operate air conditioning. While tropical storms could push up prices by disrupting natural gas production along the Gulf Coast, they could also push prices down by shutting down LNG export plants and affecting electricity supply. It is worth noting that approximately 40% of the United States' electricity comes from natural gas-fired power plants. Currently, the average amount of natural gas flowing to eight major US LNG export plants has fallen to 15.5 billion cubic feet per day so far in September, down from 15.8 billion cubic feet per day in August and well below the record 16 billion cubic feet per day in April. Among them, Cheniere Energy's Corpus Christi plant in Texas and Sabine plant in Louisiana, as well as Venture Global LNG's Calcasieu plant in Louisiana and Freeport LNG's plant in Texas, have all seen a recent decline in supply. In addition, Berkshire Hathaway Energy's Cove Point plant in Maryland is also scheduled to begin annual maintenance for about a month around September 15, which will further affect LNG exports.