US natural gas prices fell 2% and reached two-week low as production hits record highs

According to Reuters, the price of natural gas in the United States fell about 2% to a two-week low of $4 per million British thermal units on Monday.

The agency noted that record domestic production and weather forecasts suggesting warmer weather for the rest of the month contributed to the drop. According to LSEG data, average gas production in the Lower 48 US states in March rose to 105.9 billion cubic feet per day, marking a new record.

Even record gas flows to US liquefied natural gas export facilities and expectations of stronger demand for the fuel this week did not prevent prices from plummeting.

The situation at the Waha hub in West Texas was another significant factor in the price decline. Commodity prices went negative there for the first time this year due to pipeline repairs, which stopped transportation of gas associated with oil production in the area.

Still, the Reuters report draws attention to US gas inventories remaining about 12% lower than average levels for this time of year. Freezing weather in January and February contributed to more active withdrawal of the fuel from the reserves.