US natural gas prices fall below $2.78/MMBtu to 3-week low

US natural gas prices fell below $2.78/MMBtu, reaching a three-week low after the EIA reported a larger-than-expected storage build. Utilities added 40 billion cubic feet to inventories in the week ending September 4, above expectations for a 31-bcf increase and lifting total stocks to 3.254 trillion cubic feet. Inventories are 4.8% above the five-year average, reinforcing concerns over ample supply. Production has also remained strong, with Lower 48 output averaging 112.9 bcfd so far in September, above August’s monthly high. These factors have outweighed support from robust demand. Above-average temperatures across the South and Southeast are expected to sustain air-conditioning demand, while gas deliveries to major LNG export facilities have increased. Rising European and Asian demand for US LNG, as buyers seek alternatives to disrupted Middle Eastern supplies and prepare for winter, is providing additional underlying support to the market.