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[US Natural Gas: Production Decline and High Temperatures Push Up Prices] ⑴ US natural gas futures rose slightly to a one-week high on Tuesday, with the near-month contract for October delivery rising about 4 cents, or 1.3%, to around $2.94 per million British thermal units (MMBtu), on track for its highest closing price since September 4. ⑵ Driving factors included declining daily production and forecasts indicating continued warmer-than-usual weather until the end of September, with gas consumption for air conditioning and power generation expected to be higher than usual for at least two weeks. ⑶ Financial data agencies estimate that average natural gas production in the 48 contiguous US states rose to about 113.2 billion cubic feet per day in September, higher than the monthly record high set in August. ⑷ However, on a daily basis, Tuesday's production is expected to fall to a two-month low of about 108.4 billion cubic feet. ⑸ Record production and mild spring weather have kept energy companies' inventories above the five-year average since March, but last week's high temperatures are expected to narrow the inventory surplus from 4.8% to 3.6%. (6) Weather forecasts indicate that the weather will be generally warm until September 30th. Since approximately 40% of U.S. power generation relies on gas-fired power plants, demand for cooling gas will remain high. (7) Some organizations predict that average natural gas demand (including exports) in the 48 contiguous U.S. states will decrease from approximately 108.4 billion cubic feet per day this week to approximately 106.1 billion cubic feet per day next week. (8) Regarding liquefied natural gas (LNG) exports, the average daily volume flowing to the nine largest U.S. export plants in September rose to approximately 18.3 billion cubic feet, higher than August's 17.2 billion cubic feet, but lower than the monthly record of 18.8 billion cubic feet set in April. (9) On a daily basis, LNG feedstock gas is expected to fall to a three-week low of approximately 17.7 billion cubic feet on Tuesday; some energy companies plan to conduct approximately two weeks of annual maintenance on an export plant with a daily capacity of approximately 800 million cubic feet from around September 19th. (10) Globally, European benchmark gas prices are near a 44-month high of $27 per million British thermal units (MMBtu), while Asian benchmark prices are around $25. (11) US gas prices have had a limited impact on the Middle East situation, as the US is self-sufficient in natural gas and liquefied petroleum gas (LPG) exporters are already operating at full capacity, limiting export growth before new plants come online. (12) Overall, short-term prices are supported by declining production and high temperatures, but higher-than-normal inventory levels, maintenance of export facilities, and expectations of a seasonal decline in demand may limit upside potential.