US natural gas prices slide 3% to 2-month low on small daily output rise

By Scott DiSavino

April 11 (Reuters) - U.S. natural gas futures slid about 3% to a two-month low on Friday on a small increase in daily output and worries U.S. President Donald Trump's trade war with China could reduce economic growth and demand for energy around the world.

Gas futures NGc1 for May delivery on the New York Mercantile Exchange fell 10.5 cents, or 3.0%, to $3.452 per million British thermal units, putting the contract on track for its lowest close since February 10.

For the week, the contract was down about 10% after sliding about 6% last week.

Traders noted the weather would remain mostly mild through the end of April, allowing energy firms to keep adding gas to storage as normal in coming weeks.

Gas stockpiles, however, were still about 4% below normal levels for this time of year after cold weather in January and February forced energy firms to pull large amounts of gas out of storage, including record amounts in January. EIA/GAS NGAS/POLL

SUPPLY AND DEMAND

Financial firm LSEG said average gas output in the Lower 48 U.S. states has fallen to 105.9 billion cubic feet per day so far in April, down from a monthly record of 106.2 bcfd in March.

Analysts said that average decline, which was smaller than earlier in the week, was mostly due to normal spring pipeline maintenance in Texas and other parts of the country.

Looking forward, analysts said the roughly 16% drop in U.S. crude CLc1 futures over the past seven days due to uncertainty tied to Trump's on-again off-again trade tariffs could prompt energy firms to start cutting back on oil drilling. O/R

Any reduction in oil drilling in shale basins like the Permian in Texas and New Mexico and the Bakken in North Dakota could cut gas output associated with that oil production.

Meteorologists projected temperatures in the Lower 48 states would remain mostly near-normal through April 26.

With seasonally mild weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will fall from 108.3 bcfd this week to 100.1 bcfd next week and 97.8 bcfd in two weeks. The forecasts for this week and next were little changed from LSEG's outlook on Thursday.

The average amount of gas flowing to the eight big LNG export plants operating in the U.S. has risen from an all-time high of 15.8 bcfd in March to 16.1 bcfd so far in April on rising flows to Venture Global's VG.N 3.2-bcfd Plaquemines export plant that is under construction in Louisiana.

The U.S. became the world's biggest LNG supplier in 2023, surpassing Australia and Qatar, as surging global prices fed demand for more exports due in part to supply disruptions and sanctions linked to Russia's 2022 invasion of Ukraine.

Gas was trading near a six-month low of around $11 per mmBtu at the Dutch Title Transfer Facility (TTF) TRNLTTFMc1 benchmark in Europe and at a eight-month low of around $13 at the Japan Korea Marker (JKM) JKMc1 benchmark in Asia. NG/EU