US natural gas futures fell, on Wednesday, about 4% to their lowest level in 4 weeks, while production is set to record a monthly, monthly record, and at a time when global oil and gas prices tumbled.
But in the western United States, spot selling prices jumped to a two-year high, while California avoided blackouts and gas demand hit a record high, Reuters reported.
The drop in gas futures came as the Freeport LNG export plant in Texas continues to shut down, leaving more gas in the US for utility companies to pump into storage for the upcoming winter.
Freeport is the second largest LNG export plant in the United States, and was consuming about two billion cubic feet per day of gas before it closed on June 8.
Work is expected to resume at least partially in early to mid-November.
Natural gas contracts for October delivery ended the trading session on the NYMEX, down 30.3 cents, or 3.7%, to record at a settlement of $7.842 per million British thermal units, the lowest closing level since August 9.
US gas futures are still up about 110% so far this year, while higher prices in Europe and Asia keep demand for US LNG exports strong.
Gas is traded around $61 per million thermal units in Europe and around $55 in Asia. This represents a 12% drop in European gas prices.
