Natural Gas Declines Amid Increase in Production

On Wednesday, natural gas futures plummeted amid production surges and a softened mid-July outlook, potentially increasing investors’ risks.

In the Asian afternoon session, natural gas futures ending in August slid by -1.18% to $2.43 per Million British Thermal Units (MMBtu). However, it later climbed by 0.57% to $2.44 per MMBtu.

According to reports, fossil gas futures have persisted in their downtrend, anxious by surging production and a softer mid-July outlook. These indicators are contributing to cooling market fundamentals.

Meanwhile, US District Judge James Cain Jr. in Louisiana has decided to approve 16 states against the country’s President Joe Biden’s latest export moratorium on new liquified natural gas (LNG).

Analysts anticipate that any surplus supply of LNG will be absorbed by 2030, as various new projects are currently facing setbacks.

However, European gas prices are declining less, with different regions experiencing substantially high temperatures and stirring demand for electricity to keep air conditioners working.

Reports show that production has surged above 102 billion cubic feet per day (Bcf/d), flagging plenty of stockpiles. While solid demand is expected around the next 15 days, it may not be enough to cut gluts at a pace satisfactory to significant market players.

Moreover, this sentiment is evident in the steady selloffs witnessed over the past two to three weeks.

Biden Natural Gas Freeze Halted by Federal Judge

According to reports, the states had claimed that Biden’s natural gas freeze, which applies to LNG exports to countries that do not have a free trade deal, is unconstitutional.

Moreover, Texas Attorney General Ken Paxton has announced that US District Judge Cain’s decision is a win. Paxton revealed that the ruling means Biden’s illegal halt does not prevent the country’s natural gas from reaching the market while the case persists.

However, reports show that the move was a mishap in the White House’s efforts to address climate change.

According to reports, in January, the Biden administration ordered a freeze for the Department of Energy to assess LNG export impacts on greenhouse gas emissions.