US natural gas falls more than 2% to ~$2.73/MMBtu

US natural gas prices fell more than 2% to around $2.73 per million British thermal units on Thursday, as strong production and ample inventories outweighed continued weather-driven demand.

Energy companies added 36 billion cubic feet of gas to storage in the week ended August 7, above market expectations and the five-year average of 33 bcf.

Production in the Lower 48 states averaged a record 111.2 bcfd in August, up from 110.7 bcfd in July, helping keep inventories above their five-year average since March.

However, hotter-than-normal weather is expected to persist through August 28, supporting electricity demand for air conditioning and limiting the downside for gas prices.

Meanwhile, around 490,000 homes and businesses remained without power after severe storms hit the US Midwest.

Gas flows to the nine major US LNG export facilities eased to 17.1 bcfd in August, below July’s 17.2 bcfd and June’s monthly record of 17.4 bcfd.